Feds accuse real estate execs of defrauding program meant to address LA homelessness

The Brief

• The U.S. Department of Justice has charged two LA-area real estate executives with stealing funds from California’s Homekey Program meant for homeless housing.

• Cody Holmes allegedly diverted $2.2 million to pay personal expenses, while Steven Taylor is accused of bank fraud and money laundering.

• Acting U.S. Attorney Bill Essayli stated that billions of dollars intended for homelessness are being mismanaged or stolen.

The U.S. Department of Justice has accused two Los Angeles-area real estate executives of stealing money from California’s Homekey Program, which is intended to fund housing for the homeless.

Acting U.S. Attorney Bill Essayli announced the charges Thursday.

Cody Holmes of Beverly Hills has been arrested. Federal prosecutors say the state granted his company, Shangri-La, more than $25 million in Homekey money to buy and operate homeless housing in Thousand Oaks.

That has not happened. Prosecutors are now pointing to where some of the money went.

“Our investigation has shown at least $2.2 million was diverted to pay Mr. Holmes’ American Express bill, which includes purchases at luxury retailers,” said Essayli.

Another man, Steven Taylor, has been charged with bank fraud and money laundering related to a building in Cheviot Hills.

Journalist Jamie Page of the Westside Current has been investigating and reporting on this for years.

“Kind of the red flag we had seen was within a nine-day period, it went from an $11 million price tag to more than double that, so that raised red flags for us,” said Page.

Prosecutors said Taylor used fake bank statements to get the loan to buy the property, then sold it to housing developer Weingart for $27 million using city and state funding.

“We put in our first story that some realtors were bragging about the price tags that they were getting for these Homekey locations,” said Page.

Essayli indicated there is a lot still under investigation, including others who may have been involved.

“We are tracking billions of dollars of public money coming into our seven-county district that is intended to be going to address homelessness. Too often this money has been wasted, mismanaged or outright stolen,” said Essayli.