LOS ANGELES, CA — The founder of a local nonprofit accused of spending more than $7.5 million in taxpayer homelessness funds on the construction of a nightclub and bingo hall pleaded not guilty Thursday to a federal charge.
Michael Young, 46, of Baldwin Hills, is the founder of Culver City-based nonprofit Home At Last. He pleaded not guilty Thursday to wire fraud. If convicted as charged, he faces a maximum sentence of 20 years in federal prison, according to the U.S. Attorney's Office.
Home At Last received more than $118 million from the Los Angeles Homeless Services Authority, the city and county of Los Angeles and the U.S. Department of Housing and Urban Development. LAHSA alone paid the nonprofit more than $75 million for homeless housing services, according to federal prosecutors.
Prosecutors claim Young created sham vendors and used fake bids, forged signatures and fraudulent invoices to make the businesses appear to be legitimate third-party contractors.
Prosecutors claim the companies had no employees, offices or legitimate operations, and their bank accounts were controlled by Young.
Young is accused of funneling more than $7.5 million through the companies and spending taxpayer money on commercial real estate, luxury vacations, vintage car restorations and businesses unrelated to homeless services.
Authorities said more than $1 million went toward opening and operating Six Seven Five Lounge, an upscale restaurant and nightclub in Inglewood. Federal officials also accused Young of using public money to finance construction of a nightclub and adjacent bingo hall.
LAHSA canceled its contracts with Home At Last in June.
Trial was tentatively scheduled for Dec. 7 in U.S. District Court in Santa Ana.
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