LA nonprofit founder arrested after stealing $7.5m for luxury nightclub and Tahiti holiday

An LA nonprofit founder has been arrested after allegedly using millions of taxpayers’ money that was supposed to help the homeless to open his own luxury nightclub and fund a $50,000 holiday to Tahiti.

Michael Young, who founded the homelessness nonprofit Home At Last, was arrested “on a federal criminal complaint alleging he engaged in a years-long, complex scheme to defraud taxpayers and public entities providing funding for homeless housing,” the US Justice Department said. 

The 46-year-old from Baldwin Hills has been charged with wire fraud in an alleged scheme where he embezzled more than $7.5 million of public money from contracts with Los Angeles County and other publicly funded agencies. He allegedly used the cash to open a swanky restaurant, nightclub and bingo hall, go on holiday and buy properties. Young also spent $140,000 restoring a vintage Chevrolet Impala.

According to the US Justice Department, Young spent $1 million to open and run the high-end restaurant and nightclub in Inglewood called Six Seven Five Lounge. 

“Young used a web of shell corporations and fraudulent billing practices to misappropriate millions of dollars in taxpayer funds earmarked for homeless housing, including through programs administered by Los Angeles Homeless Services Authority (LAHSA),” the US Justice Department continued. 

Credit: US Department of Justice

The 46-year-old allegedly “lied repeatedly during the fraud” and “claimed funds would be used for homeless housing or for vendors providing services for homeless housing, when he diverted large amounts of taxpayer money for personal use and unrelated businesses”.

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“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, when in reality, the vendors had no employees, no locations, no legitimate operations, and existed only to funnel public money back to Young.”

Young is one of three men who have been charged in separate federal homelessness corruption and fraud cases this week.

“Today the Department of Justice, with the full force of the federal government, is announcing charges in a major fraud takedown targeting schemes that stole millions from programs meant to house California’s homeless,” Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division, said.

“As alleged, Michael Young, through Home at Last, received more than $100 million in taxpayer funds and misappropriated more than $12 million, diverting that money into shell companies, real estate, and even a nightclub and bingo hall. That scheme is now halted in its tracks. My message to every fraudster who steals from the vulnerable is clear: We will track you down, bring charges where the evidence leads, and work relentlessly to reclaim every taxpayer dollar you stole.”

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Featured image credit: US Department of Justice and Canva