New Task Force Launched to Combat Homelessness Fund Fraud in Los Angeles

LOS ANGELES, Calif. — Bill Essayli, the newly appointed U.S. attorney for Los Angeles and surrounding areas, announced the formation of a criminal task force on Tuesday aimed at investigating potential fraud and corruption involving local homelessness funds. The initiative comes following a disturbing audit that revealed significant flaws in how taxpayer dollars are being spent in the ongoing homelessness crisis.

At a news conference, Essayli stated, “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.” The task force, dubbed the Homelessness Fraud and Corruption Task Force, will investigate crimes related to the misappropriation of federal tax dollars designated to alleviate homelessness in the Central District of California, covering an estimated 20 million citizens across seven counties.

In light of a recent report highlighting mismanagement within the Los Angeles Homeless Services Authority (LAHSA), the task force will scrutinize federal, state, and local programs that receive federal grants and funding. Additionally, it will investigate schemes involving the theft of private donations intended for the homeless.

As of the last official count, L.A. County has a homeless population exceeding 75,000, with over 45,000 residing within Los Angeles city limits. In the other six counties within the district, the homeless population stands at approximately 21,000. The urgency of the task force’s mission has heightened following the Los Angeles County Board of Supervisors’ recent decision to withdraw over $300 million from LAHSA, a move endorsed after a scathing audit criticized the agency’s oversight capabilities.

L.A. County Supervisor Kathryn Barger praised the formation of the task force. She remarked, “This action aligns with steps the County just took following a scathing audit of LAHSA contracts, and it sends a clear message: public funds meant to serve our most vulnerable must be managed with transparency and integrity.”

The task force will comprise federal prosecutors from various sections within the U.S. Attorney’s Office, including the Major Frauds section, the Public Corruption and Civil Rights section, and the Civil Division’s Civil Fraud section. Collaborating agencies include the FBI, the U.S. Department of Housing and Urban Development Office of Inspector General, and the IRS.

Essayli, who previously served as a state assembly member, had been vocal about homelessness issues, previously criticizing what he termed the “homeless industrial complex.” In 2023, he spoke against a proposal that sought to allocate funds for mental health treatment facilities and housing for the homeless population.

Despite the ongoing challenges, Mayor Karen Bass has emphasized the positive impact of her administration’s Inside Safe program, which aims to transition individuals off the streets and into more stable housing situations. Bass’s spokesperson, Clara Karger, noted, “During the mayor’s first year in office, the city experienced a 10% reduction in street homelessness.” Karger stated that the focus must remain on outcomes and improving the lives of vulnerable residents.

The city of Los Angeles contributes approximately 35% of LAHSA’s funding. However, Bass has expressed concerns regarding the potential impact of the county withdrawing support, fearing it may hinder progress made thus far in combating homelessness. The decision to remove funding and potentially hundreds of employees from LAHSA is targeted for completion by July 2026, following several audits that highlighted significant financial mismanagement.

In a related development, LAHSA Executive Director Va Lecia Adams Kellum announced her resignation in response to the county’s decision, which she stated has been influenced by the agency’s recent performance critiques. Despite facing criticism, she maintained that her agency had achieved reductions in street homelessness and anticipated further improvements.

Judge David O. Carter has been vocal in court hearings regarding LAHSA’s performance, expressing skepticism about its operational promises. At a recent hearing, he stated, “If they were going to do it, they should have done it, or they should have given you a road map now of how they’re going to do it.” Essayli recently toured Skid Row, known for its high concentrations of homeless residents, with Judge Carter, solidifying the urgency of the newly formed task force.

As local officials grapple with the fallout from inadequate oversight and public pressure for accountability grows, councilmembers have called for substantial changes to the current system. Councilmember Monica Rodriguez emphasized, “I think we can’t be apologists for a failed system. I hope this helps elevate people’s sense of urgency to change, and not defending the status quo.”