With arrests and federal indictments of two California men announced on Thursday, we’re now getting an idea of how California’s billions of dollars to “end homelessness” vanished without a trace. Instead of helping to solve the problem of rampant tent encampments filled with addicts on the beaches and streets in California, things got worse. Where did all that money go?
An audit in 2024 revealed that no one knew how the homeless money was spent. I wrote about this in “No Wonder Gavin Newsom Didn’t Want an Audit to Track $24 Billion in Homeless Spending.” The audit revealed that there were no guardrails or accountability for the use of that money or its expenditure.
How could that be?
No one was watching the store. California and Los Angeles handed out billions of dollars approved by voters to help end homelessness, and when homelessness got worse, no one in government could answer where all that money went—because no one checked.
Now, a federal Homelessness Fraud and Corruption Task Force has begun running down the homeless scams that possess all the hallmarks of the ones Californians saw in its COVID spending and the notoriously poorly vetted unemployment scam in which Nigerian princes and prison inmates alike received federal and state unemployment money. And then came the $100 million FireAid scam. All of this happened on Gavin Newsom’s watch.
Related: West Coast, Messed Coast™ — Spendemic Spreads As States That Went Woke, Now Claim They’re Broke
The Homelessness Fraud and Corruption Task Force, which includes the IRS, FBI, and the Central California Acting U.S. Attorney, Bill Essayli, whose nomination sits untouched by the U.S. Senate, announced the alleged scams that had escaped the notice of Los Angeles homeless officials and the State of California.
One of the scams was run by the former chief financial officer at a downtown Los Angeles-based developer of affordable housing. Another was run by a property flipper who allegedly sold a property to a homeless housing developer for twice what he’d just paid for it, and lied to the original seller that he was going to develop the property for himself.
The former CFO of the affordable housing developer, Cody Holmes, is charged with mail fraud, which could land the 31-year-old man in federal prison for 20 years.
The California Department of Housing and Community Development (HCD), “paid approximately $25.9 million in grant money – for a state homelessness project called “Homekey” – to Shangri-La Industries LLC, a downtown Los Angeles-based developer of affordable housing.” The money had to be used to purchase, construct, and operate a homeless housing development in Thousand Oaks. The company already had other homeless developments in the works as well.
In 2022, when Holmes was Shangri-La’s CFO, he “knowingly submitted fake bank records to HCD that purportedly showed approximately $160 million supposedly controlled by Shangri-La and its affiliates to prove that Shangri-La had the capacity to fulfill the homeless housing projects for which it had co-applied for grants from HCD, including the Thousand Oaks project.”
The bank accounts were fake.
Nobody double-checked proof of funds, apparently.
In the case of the property flipper, Steven Taylor, he is accused of constructing a labyrinth of bankers and lenders, lying to each of them to establish lines of credit.
Get out your scorecard, you’ll need one to keep up with this guy’s moves:
He is further alleged to have lied to Lender B in opening the $3 million credit line with Lender B, falsely telling Lender B that he had closed his $1 million unsecured line of credit with Lender C. He lied by fabricating and sending a document that purported to be an email from an employee of Lender C falsely confirming that the Lender C credit line was closed. In fact, Taylor continued to keep open and draw down on his line of credit with Lender C, even after he opened his $3 million line of credit with Lender B, and the email from Lender C was forged…
And then he’s accused of using “the fraudulently obtained lines of credit to make down payments on real estate that he also obtained with the fraudulent loans.” Whoa. Can’t stop, won’t stop.
Related: West Coast, Messed Coast™—The Corruption Files
He could go away for more than 30 years.
And now you know why billions have been lost in an effort to “end homelessness.”
Voters and appropriators use other people’s money to do what they think is good and then assume someone else will do the bean-counting. All programs like this must fund a program chief, an auditor, special master, and cops, to keep watch over the cheaters, fakes, and bad guys. Any program that doesn’t at least have those guardrails can’t go forward.
California’s political class once again has beclowned itself and should be forced to undergo oversight and show a little humility. They’re the real scam in the state.
It’s hard to be on the straight and narrow when the people making the decisions are as corrupt and greedy as California as the inmates in state prison. How to keep track of it all? For one thing, become a PJ Media VIP Member. We’ve got a 74% sale off the price. Follow this link and use the promo code POTUS47 to get your behind the scenes, ad free experience with PJ Media. And thank you!
