U.S. Attorney Bill Essayli announced the formation Tuesday of a Homelessness Fraud and Corruption Task Force that will investigate waste and corruption involving funds allocated to fight homelessness in Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara and Ventura counties.
This task force will comprise federal prosecutors from the Major Frauds Section, the Public Corruption and Civil Rights Section, and the Civil Division’s Civil Fraud Section of the U.S. Attorney’s Office for the Central District of California.
Assisting the office will be the FBI, the U.S. Department of Housing and Urban Development Office of Inspector General, and IRS Criminal Investigation.
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According to Essayli’s office, Los Angeles County alone contains a homeless population of more than 75,000, of which more than 45,000 are within the city of Los Angeles. The total homeless population of the remaining six counties of the district exceeds 20,000.
U.S. officials say that despite voter-approved initiatives and billions of dollars spent on tackling the issue, homelessness remains a crisis, especially in Los Angeles County. Last month, a court-ordered audit found that homelessness services provided by the city and county of Los Angeles were “disjointed” and contained “poor data quality and integration” and lacked financial controls to monitor contracts for compliance and performance.
“California has spent more than $24 billion over the past five years to address homelessness,” Essayli said. “But officials have been unable to account for all the expenditures and outcomes, and the homeless crisis has only gotten worse. Taxpayers deserve answers for where and how their hard-earned money has been spent. If state and local officials cannot provide proper oversight and accountability, we will do it for them. If we discover any federal laws were violated, we will make arrests.”
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Both the Los Angeles City Council and the Los Angeles County Board of Supervisors recently moved to withdraw from the Los Angeles Homeless Services Authority, the joint city/county agency responsible for spending hundreds of millions of dollars in funds earmarked to provide homeless services.
LAHSA has been dogged by accusations of waste, inefficiency and lack of transparency.
During the COVID-19 pandemic, the federal government sent $100 million in emergency aid to Los Angeles County to address homelessness. Last month, HUD awarded more than $200 million to address homelessness in Los Angeles, Essayli said.
Partnering with federal law enforcement agencies, the Homelessness Fraud and Corruption Task Force will investigate crimes related to the misappropriation of federal tax dollars intended to alleviate homelessness in the Central District of California.
The task force will prioritize a review of federal, state and local programs receiving federal grants and funding. It will also investigate fraud schemes involving the theft of private donations intended to provide support and services for the homeless population.
“Any exploitation of the homelessness crisis via the theft of funds intended to improve conditions cannot and will not be tolerated,” said Akil Davis, the assistant director in charge of the FBI’s Los Angeles Field Office. “The FBI is proud to join the newly formed task force and will continue to investigate fraudulent schemes and corrupt officials who misappropriate government funding or private donations intended to aid those in need.”
Tyler Hatcher, special agent in charge of IRS Criminal Investigation in Los Angeles, said his agency “is uniquely poised to track any funds granted through various federal programs. We look forward to working with our federal partners to ensure taxpayer and donor funds are spent in accordance with their original intended purposes.”
Essayli was sworn in April 2 as the U.S. Attorney for the Central District of California following his appointment by Attorney General Pam Bondi. Prior to that he was as a twice-elected member of the state Assembly.
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