The founder of a Culver City-based nonprofit who allegedly misappropriated more than $7.5 million in taxpayer funds and used the money for commercial real estate and the construction of a nightclub and bingo hall pleaded not guilty on Oct. 22 to a federal charge.
Michael Young, 46, of Baldwin Hills, who prosecutors contend ran the nonprofit Home At Last while engaged in a years-long scheme to defraud taxpayers and public entities providing funding for homeless housing, faces a single wire fraud count. The felony carries a possible sentence of up to 20 years behind bars.
The trial was tentatively scheduled for Dec. 7 in U.S. District Court in Santa Ana. According to the complaint, Young used shell corporations and fraudulent billing practices to misappropriate millions of dollars in taxpayer funds earmarked for homeless housing, including through programs administered by the Los Angeles Homeless Services Authority. The troubled agency until recently coordinated housing and social services for the homeless in Los Angeles County.
Among other alleged misuses of taxpayer money, Young spent more than $1 million to open and operate a high-end restaurant and nightclub in Inglewood called Six Seven Five Lounge, according to the U.S. Attorney’s Office.
Through numerous contracts, Young received more than $118 million in public funds from LAHSA, the city and county of Los Angeles, and the U.S. Department of Housing and Urban Development, court papers show.
LAHSA alone paid Home At Last more than $75 million for homeless housing services. Young allegedly used a sham vendor fraud to misappropriate more than $7.5 million of those funds, federal prosecutors said.
Prosecutors believe Young lied repeatedly during the fraud, claiming funds would be used for homeless housing or for vendors providing services for homeless housing, when he is suspected of diverting large amounts of taxpayer money for personal use and unrelated businesses.
According to the U.S. Attorney’s Office, he created sham vendors to hide self-dealing transactions, submitting fake bids, forged signatures, and fraudulent invoices to make it appear the sham vendors were legitimate, third-party companies, offering fair market services. In reality, prosecutors say, the vendors had no employees, no locations, no legitimate operations, and existed only to funnel public money back to Young.
Young allegedly controlled the sham vendors’ bank accounts and used millions in taxpayer funds for his personal enrichment, including spending millions for his lounge, luxury vacations, vintage car restorations, and commercial properties unrelated to homeless housing. LAHSA canceled its contracts with Home At Last in June and Young was arrested three months later.
