U.S. Attorney Bill Essayli, who was appointed under the Trump administration, has launched an investigation into California’s spending on homelessness programs. Despite the state allocating billions of dollars to address homelessness, California continues to face a significant homeless population.
Essayli announced that two individuals have been arrested in connection with alleged fraud involving public funds meant for combating homelessness and building affordable housing. According to the Department of Justice, Cody Holmes of Beverly Hills was taken into custody after allegedly using fake bank records to secure nearly $26 million from the California Department of Housing and Community Development for Shangri-La Industries LLC, where he previously served as CFO. The funds from Project Homekey were intended for affordable housing construction in Thousand Oaks. However, Holmes is accused of diverting the money for personal expenses, including paying credit card bills and purchasing goods from luxury retailers.
“Even though the developer received all the money from the state, the developer did not complete the construction of the Thousand Oaks project,” Acting U.S. Attorney Bill Essayli said during a news conference Thursday. “Essentially, he stole the money.”
Essayli further stated: “California has spent billions of taxpayer dollars to combat its homelessness crisis with very little to show for it. Six months ago, I announced the Homelessness Fraud and Corruption Task Force. Today, we begin to hold people accountable by announcing two cases where more than $50 million of homelessness funding was fraudulently obtain.”
Federal agents arrested Cody Holmes, and a grand jury indicted real estate developer Steven Taylor in separate cases. Taylor is accused of lying to banks to obtain fraudulent loans, including one for a Cheviot Hills property that was later sold to a homeless housing developer for more than double its original purchase price. Essayli said, “Holmes allegedly siphoned public funds for homelessness and used millions of dollars for his own use. Taylor is accused of lying to banks to fraudulently obtain loans, including a Cheviot Hills property he flipped and sold to a homeless housing developer for more than double the original purchase price.”
The investigation comes amid ongoing concerns about how effectively California’s resources are being used to tackle its persistent homelessness problem.
