{"id":405,"date":"2026-06-11T18:42:30","date_gmt":"2026-06-11T18:42:30","guid":{"rendered":"https:\/\/urbaneconomynews.com\/?p=405"},"modified":"2026-06-11T18:42:30","modified_gmt":"2026-06-11T18:42:30","slug":"hud-yanks-federal-funding-from-la-homeless-agency-launches-ig-investigation-into-potential-fraud","status":"publish","type":"post","link":"https:\/\/urbaneconomynews.com\/?p=405","title":{"rendered":"HUD Yanks Federal Funding From LA Homeless Agency, Launches IG Investigation into Potential Fraud"},"content":{"rendered":"
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The Department of Housing and Urban Development (HUD) has immediately suspended federal funding to the lead homeless agency in Los Angeles amid allegations of \u201cobvious fraud\u201d and \u201cwanton mismanagement.\u201d<\/p>

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HUD\u2019s inspector general, Brian Harrison has also launched an investigation into the Los Angeles Homeless Services Authority (LAHSA) and its leadership, Fox News Digital reported Thursday.<\/p>\n

The scandal-plagued agency has received nearly $1 billion in federal funding since 2021, even as the homeless crisis exploded on city streets.<\/p>\n

The White House Task Force to Eliminate Fraud, led by Vice President JD Vance, said in a statement on X Thursday that it is \u201ctaking bold action alongside HUD to target and eliminate massive potential fraud against American taxpayers.\u201d<\/p>\n

The inspector general sent a letter sent to LAHSA\u2019s board chair Wendy Greuel and its CEO Gita O\u2019Neill, reportedly detailing \u201cconflicts of interest, financial mismanagement, fraud, lack of oversight, and more from the homelessness agency, which has faced efforts by the city and county to take it over.\u201d<\/p>\n

\u201cHUD cannot ignore LAHSA\u2019s wanton mismanagement of public funds. HUD\u2019s mission is to reduce the plague of homelessness in America,\u201d the IG\u2019s letter said, according to Fox.\u00a0 \u201cTurning over billions of dollars from American taxpayers to an organization under investigation and suspected of gross misuse of federal funding and \u201cobvious fraud\u201d does nothing to reduce homelessness. Indeed, diverting dollars from worthy programs to LAHSA merely makes the homeless crisis worse.\u201d<\/p>\n

One conflict of interest cited involves a former LAHSA executive directing $2.1 million to her husband\u2019s Santa Monica-based nonprofit.\nFormer LAHSA CEO Va Lecia Adams Kellum, resigned last year after the blatant conflict of interest was discovered.<\/p>\n

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A former LAHSA employee who was fired after complaining about the agency\u2019s gross mismanagement accused Kellum of trying \u201cwithout success to delete two emails sent to her by Mayor Karen Bass,\u201d according to the Los Angeles Times.<\/em><\/p>\n

The whistleblower also alleged that Kellum became \u201cextremely inebriated and got a \u2018lap dance\u2019 from a female consultant that she had just hired to do work for LAHSA\u201d while attending a conference in Washington, D.C.<\/p>\n

Kellum had a base salary of $430,000 per year during her tenure, according to LAist, while her successor, interim CEO Gita O\u2019Neill, reportedly made approximately $370,000 last year.<\/p>

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Scott Brady, Executive Director of the White House Fraud Task Force condemned O\u2019Neil\u2019s salary on X, saying: \u201cIn other words, taxpayers paid for the high six-figure salary of an executive running a fraud-filled organization (also paid for by taxpayers).\u201d<\/p>\n

Notably, a federal judge concluded last year that LAHSA had committed \u201cobvious fraud\u201d after it repeatedly requested full funding for an 88-bed shelter even though the agency knew the shelter was only operating at half-capacity.<\/p>\n

According to HUD, LAHSA failed to verify nearly 2,300 housing sites for which it was responsible and \u201c70 percent of the contracts for those sites did not disclose any expenses over the prior year.\u201d<\/p>\n

Moreover, in November 2024, the City Controller\u2019s Office found that LAHSA also failed to spend $513 million in budgeted public funds in fiscal year 2024.<\/p>\n

In addition to the now terminated federal funding, LAHSA also receives funding at city, county, and state levels.<\/p>\n

\u201cUnder President Trump\u2019s leadership, HUD will fund results, not corrupt failure or the homeless industrial complex,\u201d HUD Secretary Scott Turner said in a statement to Fox. \u201cYear after year, hundreds of millions of taxpayer dollars were funneled to LAHSA with little accountability. Meanwhile, homelessness skyrocketed. Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve.\u201d<\/p>\n

On X, Turner made a similar statement, only blunter: \u201cTaxpayers will not bankroll LA\u2019s fraud-filled homelessness industrial complex,\u201d he wrote.<\/p>\n

\u201cIt is unconscionable that Los Angeles has wasted billions of taxpayer dollars that was supposed to be used on housing our nation\u2019s most vulnerable. Instead of providing a roof and care for the homeless, Los Angeles has used these funds to line the pockets of left-wing NGOs. Such a disgrace ends today,\u201d stated Andrew Ferguson, Chairman of the Federal Trade Commission, and Vice Chairman of the White House Fraud Task Force. \u201cLos Angeles didn\u2019t care about helping the homeless, but the Trump Administration does,\u201d he said.<\/p>\n

\u201cFor years American taxpayers have been sending billions to Los Angeles,\u201d said Scott Brady, Executive Director of the White House Fraud Task Force. \u201cThe result? Fraud and corruption. That ends today.\u201d<\/p>

Read more Florida Supreme Court Allows New GOP Congressional Map to Remain in Place<\/a><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

The Department of Housing and Urban Development (HUD) has immediately suspended federal funding to the lead homeless agency in Los Angeles amid allegations of\u2026<\/p>\n","protected":false},"author":1,"featured_media":403,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-405","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\nHUD Yanks Federal Funding From LA Homeless Agency, Launches IG Investigation into Potential Fraud - Urban Economy news<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/urbaneconomynews.com\/?p=405\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"HUD Yanks Federal Funding From LA Homeless Agency, Launches IG Investigation into Potential Fraud - 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