As part of a special federal task force investigating where a staggering $24 billion designated for homelessness in California has ended up, the Department of Justice revealed initial findings on Thursday, announcing new criminal cases against two LA area real estate developers who the federal government says misused roughly $50 million in a combination of federal, state and local dollars earmarked for homelessness.
“This is not a victimless crime,” said Akil Davis, FBI Los Angeles assistant director in charge. “As the millions of dollars lost could have been used for housing the homeless or other local priorities funded by California taxpayers.”
Cody Holmes, 31, of Beverly Hills was arrested and charged with federal felony fraud Thursday morning for allegedly receiving $25.9 million in grant money intended for a homeless housing project that was never built.
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According to court documents, the California Department of Housing and Community Development paid nearly $26 million to Shangri-LA Industries LLC in October 2022 to be used for the purchase, construction and operation of homeless housing in Thousand Oaks, California.
The government alleges that Holmes, as the then-CFO of Shangri-LA, submitted fake bank documents and balance sheets to get approved for the grant money. Prosecutors allege Holmes lived a lavish lifestyle and used some of the homeless funding to pay $2 million towards American Express cards that included purchases at “well-known luxury retailers.”
“If you steal money or allow it to be stolen, we will find you, and we will prosecute you,” said Bill Essayli, acting U.S. attorney for California’s Central District.
Fox News has reached out to Shangri-LA for comment.
In a separate case, federal investigators arrested 44-year-old Steven Taylor of Los Angeles, and charged him with seven counts of bank fraud, one count of aggravated identity theft and one count of money laundering.
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The indictment alleges that Taylor provided false bank statements and records to obtain properties across LA. Most recently, prosecutors say he was involved in a 2023 scheme in which he provided false documents to purchase a property in LA’s Cheviot Hills neighborhood for $11 million. He then quickly resold the property for $27 million.
At the time of purchase, the building was being used as a senior living facility. Federal prosecutors allege Taylor “misrepresented” that he intended to renovate and operate the Cheviot Hills property himself but was already “in contract to sell the Shelby property.”
The DOJ says the purchaser of the property is a well-known nonprofit in LA called “Weingart,” which used federal and local funds to make the purchase. Essayli says Weingart is part of the investigation.
The longtime CEO of Weingart is former California Democratic State Sen. Kevin Murray. Murray was not directly named or charged. Fox has reached out to Weingart and Murray for comment.
After the charges were announced, Los Angeles Mayor Karen Bass released a statement saying, in part, “My administration has zero tolerance for corruption – period. We’re working with the U.S. Attorney’s office to ensure that anyone who engages in fraud against the city will face the full force of the law and my administration’s unwavering commitment to accountability.”
In April of this year, Essayli announced the launch of the Homeless Fraud and Corruption Task Force – aimed at investigating how the state spent $24 billion between fiscal years 2018 and 2023.
“California state officials failed to provide meaningful oversight over the individuals who received most of these funds, and they had little to no answers to the public’s demand for accountability. Well, that accountability starts today,” Essayli said.
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