Trump administration cuts funding to LA homeless organization amid fraud allegations
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INTERMEDIATE: Trump’s top agency is cutting funding to a Los Angeles agency responsible for coordinating billions in homeless services after accusing it of “blatant fraud,” “mismanagement” and repeated failures to protect taxpayer dollars, Fox News Digital has learned.
The Department of Housing and Urban Development (HUD), a member of the White House anti-fraud task force led by Vice President JD Vance, is immediately suspending funding for the Los Angeles Homeless Services Authority (LAHSA) while the HUD inspector general investigates possible wrongdoing by the agency and its leadership, according to a letter sent to the chairman of LAHSA, Greece and the CEO of LAHSA, Greece. obtained and reviewed by Fox News Digital.
The book details the conflicts of interest, mismanagement of funds, fraud, lack of oversight, and more from the homeless organization, which has faced city and county takeover efforts.
The move puts one of the nation’s largest homeless populations under direct federal scrutiny after years of criticism that billions have gone into Los Angeles’ homeless programs while the problem remains entrenched on the streets. LAHSA receives funding at the city, state, county and state levels, and the group is receiving nearly $1 billion from the federal government through 2021, according to HUD.
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A person walks through piles of debris in a homeless neighborhood near East 14th Street in downtown Los Angeles, California, on September 25, 2025. (Allen J. Schaben / Los Angeles Times via Getty Images)
“Ending LAHSA’s participation in federal government programs is a necessary step toward accomplishing that important mission in Los Angeles,” HUD wrote in the letter. “LAHSA’s failures have been so egregious and widespread that Los Angeles County has withdrawn its funding of the agency, and the City of Los Angeles is considering doing so.”
LAHSA’s former CEO, Va. Lecia Adams Kellum, resigned last year after it was discovered that she was involved in directing $2.1 million in federal funds under LAHSA’s control to her husband’s Santa Monica nonprofit employer.
HUD says a federal judge last year also concluded that LAHSA committed “manifest fraud” after allegations that it kept asking for funding for an 88-bed shelter even though it knew the shelter was operating at about half.
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HUD noted in its letter that the judge also considered placing LAHSA in receivership.
LAHSA’s inability to confirm the availability of the nearly 2,300 housing sites it was dealing with is another recent problem plaguing homeless providers, according to HUD, which said 70% of contracts for those sites did not disclose any costs last year.
Homeless shacks line the streets of Venice Beach in Los Angeles amid ongoing concerns about crime and quality of life problems. The Los Angeles Homeless Services Authority will conduct its annual point-in-time census to assess the county’s homeless population. (Reuters)
A public audit of LAHSA, meanwhile, found a pattern of late payments to service providers and poor record keeping that prevented it from monitoring contracts, including $5 million in payments sent to five different service providers, according to the Associated Press. In November 2024, the Office of City Control found that LAHSA had failed to spend $513 million in public funds allocated for the 2024 fiscal year, blaming a lack of staff and outdated technology, according to HUD.
Another audit concluded that LAHSA’s poor record-keeping prevented it from accurately identifying or quantifying how much its spending benefited Los Angeles’ homeless population.
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The Chairman of the Federal Trade Commission Andrew Ferguson, a member of the White House Task Force to eliminate Fraud, commended the leadership in this matter to the Secretary of HUD Scott Turner, President Donald Trump and Vance, who serves as the chairman of the fraud task force established earlier this year.
“Los Angeles didn’t care about helping the homeless, but the Trump administration did,” Ferguson told Fox News Digital. “It makes no sense that Los Angeles spent billions of taxpayer dollars that should have been used to build housing for our most vulnerable nation. Instead of providing shelter and care for the homeless, Los Angeles used these funds to line the pockets of left-wing NGOs. Such a disgrace ends today.”
Los Angeles Mayor Karen Bass and Los Angeles officials pointed to the latest homeless census data as evidence that the problem is starting to improve, as LAHSA reported that homelessness decreased for the second year in 2025 and Bass said it was the first time in the city’s recent history that homelessness has decreased for two years in a row.
But the numbers still show more than 72,000 homeless people across Los Angeles County, and critics have continued to argue that the small decline doesn’t erase years of spending, encampments and repeated audit findings that the county’s homelessness program has failed to adequately track whether taxpayer dollars are producing results.
Los Angeles Mayor Karen Bass has advanced in her bid for re-election as Mayor of Los Angeles. (Getty Images)
The federal action from HUD comes after Los Angeles city and county officials have already begun pushing back against LAHSA, the Associated Press reported last year.
The city council moved to bypass agencies and contract directly with providers, while the county moved to redirect hundreds of millions of dollars in annual homelessness funding away from LAHSA and a new county department, citing the need for stronger accountability after a series of studies.
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“HUD cannot ignore LAHSA’s mismanagement of public funds. HUD’s mission is to reduce the scourge of homelessness in America,” said the organization’s letter to LAHSA leadership on Thursday. “Turning billions of dollars from American taxpayers to an organization under investigation and accused of gross mismanagement of public funds and “outright fraud” does nothing to reduce homelessness. Indeed, diverting dollars from appropriate programs to LAHSA only makes the problem of homelessness worse.”
