Federal authorities charged two Southern California real estate executives in separate schemes that allegedly stole millions of dollars in public funds intended to fight homelessness.
The U.S. Attorney’s Office said Brentwood developer Steven Taylor and former Shangri-La Industries chief financial officer Cody Holmes are facing felony fraud charges tied to California’s Homekey program, which finances conversions of hotels and other properties into apartments for unhoused residents, the Los Angeles Times reported.
Prosecutors claim Taylor allegedly falsified bank statements and misled lenders to buy a Cheviot Hills nursing home for $11.2 million, then sold it weeks later to nonprofit developer Weingart Center Association for $27.3 million. Weingart allegedly used city and state Homekey dollars to complete the acquisition.
Taylor reportedly hid a double-escrow deal from lenders. In another incident, he allegedly forged bank correspondence to secure financing, sending an email to a lender claiming to be an employee of another bank and falsely saying that the credit line with the bank had been closed.
Prosecutors say Taylor altered real bank statements, including tweaking the dollar amounts and bank account numbers to display millions of dollars in deposits that didn’t exist.
In the second case, Cody Holmes allegedly fabricated balance sheets to obtain $25.9 million in Homekey funding for affordable housing developer Shangri-La Industries, then siphoned off millions to pay personal credit card bills and luxury expenses like jewelry, music festival tickets and a Beverly Hills mansion.
More than $2 million allegedly went from Shangri-La accounts to Holmes’ personal American Express cards over six months. Shangri-La later sued Holmes, accusing him of embezzlement.
“Accountability for the misuse of billions of tax dollars intended to combat homelessness starts today,” Acting U.S. Attorney Bill Essayli said in a statement. “The two criminal cases announced is only the tip of the iceberg and we intend to aggressively pursue all leads and hold anyone who broke any federal laws criminally liable.”
Los Angeles Mayor Karen Bass also denounced the alleged acts and reinforced her commitment to bringing down the full hammer of the law.
Taylor faces seven counts of bank fraud, one count of aggravated identity theft, and one count of money laundering, while Holmes faces mail fraud charges.
Read more
Even with $120M in state grants, Shangri-La Industries can’t repay loans
Residential
San Francisco
Project Homekey to pump $226M into Bay Area homeless market
Project Homekey to pump $452M into LA market
