Feds: Homeless aid money allegedly turned into lavish lifestyles for 2 men
Two men face federal charges in separate cases linked to public homelessness funds in California. It comes at a time when homelessness continues to increase in the state.
Arrests made
Federal law enforcement arrested Cody Holmes, 31, on several charges. Holmes, who lives in Beverly Hills, served as chief financial officer of Shangri-La Industries, a downtown Los Angeles-based developer of affordable housing.
According to officials, the California Department of Housing and Community Development paid Holmes’ company nearly $26 million in grant money to develop properties for a program called Homekey. That statewide program is designed to provide housing for people experiencing homelessness.
The new housing was slated for Thousand Oaks, following millions of dollars already spent on properties in nearby San Bernardino and Monterey counties.
Instead, Holmes allegedly embezzled roughly $2.2 million of that money by transferring it from a business account to one he controlled. He reportedly used it to pay for exotic cars, a Birkin bag, monthly rent for a 6,500-square-foot mansion and more.
“Accountability for the misuse of billions of tax dollars intended to combat homelessness starts today,” Bill Essayli, the acting United States Attorney for the Central District of California, said in a statement.
In a separate case, Steven Taylor, 44, faces several charges of his own, including money laundering.
Taylor, who lives in Brentwood, allegedly spent six years using fake bank statements and false cash representations to get millions of dollars in loans and lines of credit to operate his real estate business.
He then used all that money to buy homes in numerous areas, including one in Cheviot Hills for $11.2 million. Taylor then allegedly sold that property for $27.3 million to a homeless housing developer.
That developer made the purchase with public funds from the city of Los Angeles and the state of California.
Taylor could see a maximum sentence of 30 years in prison if convicted. He’s currently free after posting a $3.6 million bond.
“In both of these cases, defendants took advantage of funds allocated to assist the homeless, some of the most vulnerable people in society and many of whom may be suffering from myriad conditions, including addiction,” Akil Davis, assistant director of the FBI’s Los Angeles Field Office, said in a statement.
California homelessness
The crimes come at a time when homelessness continues to rise. Recent data shows homelessness increased 3% statewide last year compared to the year before.
That’s even with Los Angeles reporting a decrease in the number of homeless in the city, although some question the methodology used to calculate that decrease.
The state holds nearly a quarter of all homeless Americans, including 44% of all the “chronically homeless,” or those who have a disability and have been homeless for a long time.
To combat those numbers, the state throws big money at the issue.
The state allocated $2.5 billion of taxpayer dollars to address the issue in fiscal year 2025, a significant drop from the $6.8 billion spent the year prior.
In addition to spending more, the state must also improve oversight on how the billions in taxpayer funding are doled out.
A federal audit released in August 2024 found California’s Department of Housing and Community Development, which oversees homelessness spending, left nearly $320 million in federal funding exposed to fraud and abuse.
There’s also concern about reduced funding from the federal government under the Trump administration.
The Homelessness Fraud & Corruption Task Force hopes to get all that money to where it’s most needed.
“Today’s actions show our commitment to ensuring the public that we will investigate missing funds that were intended to benefit some of the most vulnerable Californians,” Special Agent in Charge Tyler Hatcher, of IRS Criminal Investigation’s Los Angeles Field Office, said in a statement.
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Ella Rae Greene, Editor In Chief
