FBI agents dragged a charity worker from her South Los Angeles home before dawn Wednesday in a sweeping raid targeting a multi-million dollar homeless services fraud scheme.
Lakiya Malone, 48, emerged from her residence in handcuffs as agents in Kevlar vests pounded on her door and shouted for her to “come out!” while others trained rifles on the house, according to the source material. The dramatic arrest came more than seven months after federal prosecutors first charged Alexander Soofer, 42, with stealing $23 million in public funds meant for Los Angeles’s homeless population.
Malone worked for SSG, a key contractor within the city’s homeless services network. Federal prosecutors allege she took more than $180,000 in bribes and kickbacks from Soofer, the executive director of the nonprofit Abundant Blessings, in exchange for steering housing referrals his way.
The scheme involved “ghost” participants who never actually lived at the housing sites, prosecutors charge. Malone allegedly fabricated files for these phantom clients using fake welcome letters, forged sign-in sheets, and falsified eligibility forms. Soofer paid her through checks made out to both her personally and an entity she controlled, Grateful Hearts Realty & Consulting, disguising the payments as consulting fees.
The payments were actually tied to the volume of referrals Malone sent and to the ghost clients she helped create, according to the 21-count federal indictment against her.
Soofer allegedly received more than $17 million from SSG during the scheme, with the fraudulent referrals substantially inflating that amount. He has since agreed to plead guilty to one count of wire fraud and one count of money laundering, admitting in a plea agreement to his role in the bribery scheme with Malone.
He further admitted obtaining $23 million in public money intended to combat homelessness, at least some of it through fraud, and pocketing at least $2 million in taxpayer money for personal enrichment and for businesses unrelated to homeless housing. Soofer has agreed to forfeit his ill-gotten gains to the U.S. Government and is expected to formally enter his guilty plea in the coming weeks.
The case has drawn intense scrutiny to the Los Angeles Homeless Services Authority, the joint city-county agency that coordinates housing and social services across Los Angeles County. The agency has faced recurring problems with corruption and late payments to nonprofit providers, issues the Trump administration cited when it suspended federal funds to LAHSA.
Bill Essayli, the top Los Angeles prosecutor leading the newly formed Homeless Fraud and Corruption Task Force, vowed the crackdown will continue ascending through the ranks of the troubled agency.
“We’re working our way up the chain. We’re getting to those who are enabling the fraud, and not just the fraudsters themselves,” he told the California Post.
“That’s where the taxpayer’s money is going — and it’s not going to the homeless,” he added.
Malone faces severe penalties if convicted: up to 20 years per wire fraud count, 10 years per bribery count, and five years on the conspiracy charge.
Wednesday’s operation extended beyond Malone’s arrest. Federal agents also pursued two other suspects, including one homeless services executive who allegedly diverted $12 million in taxpayer cash meant for the homeless toward personal luxuries including a bingo hall and a nightclub.
The sweeping enforcement action represents one of the most aggressive federal interventions yet in Los Angeles’s long-troubled homeless services infrastructure, where public money has repeatedly vanished into fraudulent schemes while tens of thousands remain unhoused on the streets.
Soofer is expected to formally plead guilty to his felony charges in the coming weeks.