A federal prosecutor investigating corruption in California’s homeless services said more arrests are coming after two real estate executives were charged with allegedly bilking taxpayers out of millions.
First Assistant US Attorney Bill Essayli told The Post that a coalition of federal agencies uncovered wrongdoing on a staggering scale as he criticized Democrats as “colossal failures” for letting corruption persist for years.
“We followed the money and very quickly we uncovered massive amounts of fraud,” Essayli said.
A large homeless encampment in LA. Ringo Chiu for NY Post
The recent indictments of housing executives Cody Holmes and Steven Taylor were just the tip of the iceberg, according to Essayli, who said the duo allegedly pocketed state funds intended for homeless housing.
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“That’s just beginning to scratch the surface,” Essayli said. “We have dozens of other investigations ongoing and we expect to bring more charges this year, and perhaps this month.”
Acting United States Attorney for the Central District of California Bill Essayli gestures during a press conference.
Holmes, a former executive at Shangri-La Industries, allegedly embezzled about $2 million from “Homekey,” a homeless housing program created during the pandemic, using the proceeds for luxury purchases for himself and his girlfriend.
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Taylor, a Brentwood developer, is accused of defrauding lenders in a scheme to “flip” a Cheviot Hills property to Weingart Center Association, a state-funded homeless nonprofit.
Kevin Murray, Weingart Center’s CEO, resigned from his role at a state housing oversight board amid questions about his knowledge of the housing deal.
Essayli, a former California state Assembly member, criticized his former Democratic colleagues for presiding over fraud and corruption, calling oversight efforts little more than lip service.
“They’re liars, they’re straight up liars,” he said. “They’ve been in control of the government, all branches of government, for over a decade … when I was in the Legislature, they had no interest. They do not care.”
Recent indictments of two housing executives, Cody Holmes and Steven Taylor, who allegedly ripped off state funds intended for homeless housing, are just the tip of the iceberg, according to a federal prosecutor. David Buchan for NY Post
“They will feign shock and horror but continue to push the money out the door,” he continued. “They care about spending money — they don’t care about accounting for money.”
A 2024 State Auditor report found that California didn’t properly track outcomes for $24 billion spent on homelessness programs. Last year, a scathing court-ordered audit described Los Angeles homeless services as a financial black hole with no accountability or clear outcomes.
President Donald Trump announced a fraud investigation in California in a Truth Social post on Tuesday, but Essayli said “it’s already happening.”
“There needs to be independent oversight from someone who is not politically connected to these individuals,” he said. “The only people who can do that right now is the federal government — the FBI, the IRS.”
“Everything and anything is on the table,” Essayli said.
The US attorney launched a homeless fraud task force last year that involves the FBI, IRS, the Office of the Inspector General, and other federal agencies.
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