Federal investigators are examining the disappearance and misuse of billions of dollars intended to address homelessness in Los Angeles County, following revelations that large sums of taxpayer money remain unaccounted for and have allegedly been diverted for personal use.
The issue was discussed in an on-air exchange between journalist Elizabeth Vargas and U.S. Attorney Bill Essayli, who detailed the scope of the problem and the ongoing federal response.
According to Vargas, a massive portion of the funds sent to Los Angeles County over several years cannot be properly traced.
“Point $3 billion sent to LA County over four years is completely unaccounted for. That’s $2.3 billion that could have been used to clean up this or find housing for people who live like this,” Vargas said.
“Taxpayers have forked over 10s of millions, if not hundreds of millions, of dollars to fix it, and people are stealing it.”
Essayli said the lack of accountability surrounding homelessness spending has been a long-standing issue that went largely unchecked until recently.
“It’s unbelievable. And you know, it’s probably been going on for a very long time, but unfortunately, no one’s really looked at it until recently,” Essayli said.
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“Before this position, I was in the state legislature, and we would ask a lot of questions about the billions of dollars being spent every year to solve homelessness, and we can all see with our eyes and ears that it wasn’t being solved, and the money wasn’t going to the people we needed it most.”
Essayli explained that one of his first actions after taking office as U.S. Attorney in Los Angeles was to establish a dedicated task force focused on fraud and corruption tied to homelessness funding.
“So one of the first things I did after being appointed as the US Attorney here in LA was to create the homeless fraud and corruption Task Force,” he said.
“We’re starting from the bottom up, and we began brand new investigations with the IRS and the FBI, and it’s already culminated in two separate indictments, and I can assure you that more will come.”
Vargas pointed to details from the indictments already announced, highlighting the nature of the alleged misuse.
“In the two indictments you’ve announced thus far, in one case, somebody was taking this money that was meant to build homes for the homeless and spending it on things like tickets to Coachella concert, jewelry and a Beverly Hills mansion,” Vargas said.
Essayli described the allegations as emblematic of what can happen when massive sums are distributed without strict oversight.
“It’s frankly outrageous, and this goes to show, when you hand out billions of dollars with little to no oversight, there are people out there that will take advantage,” he said.
“And that’s always been, our suspicion is that there’s been very little oversight or accountability to the individuals who receive this money.”
He said most of the funding is routed through nonprofits or developers who claim the money will be used to build housing, but federal investigators have found otherwise in the cases already charged.
“And what we saw in these just these two investigations, that’s not where the money went, and it was used to pay one individual’s American Express Bill,” Essayli said.
“In these two cases, represent over a $50 million loss, and that’s again, scratching the service surface.”
Essayli stressed that the investigation is far from over and that federal agencies are aggressively pursuing additional leads.
“We have many more investigations open that I cannot get into, but we are going to follow the money,” he said.
“We’re going to follow every dollar, and we want to make sure the money went to its intended objective, which is to assist the homeless, and if any of it was diverted for personal use or other use that wasn’t authorized, we intend to criminally prosecute those individuals.”
He detailed the breadth of the ongoing efforts.
“And like I said, we have multiple, multiple ongoing investigations. We have the IRS conducting the financial review. We have the FBI going out and conducting interviews. We’re issuing subpoenas. We’re doing search warrants. There is a lot happening that the public cannot see right now,” Essayli said.
Vargas questioned how such large-scale misuse could persist for years without detection.
“How did this go unnoticed for so long?” she asked.
Essayli attributed the lack of scrutiny to California’s political environment and the absence of meaningful checks on spending.
“This is a problem we saw in the legislature. When you have a state like California that frankly enjoys a super majority controlled by one political party, there’s very little checks and balances in the system to hold that accountability, and there’s really, again, never been any oversight,” he said.
He added that recent political changes at the federal level have altered the enforcement landscape.
“But now you have the federal government, the election was won by the opposite party, and you have an election that has consequences,” Essayli said.
“And now you have prosecutors in the federal government that are independent and are going to take an objective look.”
WATCH:
California is the fraud and money laundering capital of the world
“$2.3 billion sent to Los Angeles County over four years is completely unaccounted for”
California homeless money found paying for a “Beverly Hills mansion”
“Taxpayers have forked over tens of millions, if not… pic.twitter.com/s3eeekiPWu
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