A federal prosecutor probing corruption in California’s homeless services promised that more arrests are coming after two real estate executives were busted for allegedly bilking taxpayers out of millions.
First Assistant US Attorney Bill Essayli told The Post a coalition of federal agencies has uncovered wrongdoing on a staggering scale as he blasted Democrats as “colossal failures” for letting corruption fester for years.
“We followed the money and very quickly we uncovered massive amounts of fraud,” Essayli said.
The recent indictments of housing executives Cody Holmes and Steven Taylor were just the tip of the iceberg, as the duo face accusations that they pocketed state funds intended for homeless housing, the prosecutor said.
“That’s just beginning to scratch the surface,” Essayli said. “We have dozens of other investigations ongoing and we expect to bring more charges this year, and perhaps this month.”
Holmes, former executive at Shangri-La industries, allegedly embezzled about $2 million from “Homekey” — a homeless housing program created during the pandemic — and used the proceeds for luxury purchases for himself and his girlfriend.
Taylor, a Brentwood developer, is accused of defrauding lenders in a scheme to “flip” a Cheviot Hills property to Weingart Center Association, a state-funded homeless nonprofit.
Kevin Murray, Weingart Center’s CEO, resigned from his role at a state housing oversight board amid questions about his knowledge of the dirty housing deal.
Essayli, a former California state Assembly member, blasted his former Democratic colleagues for presiding over fraud and corruption and described oversight efforts as little more than lip service.
“They’re liars, they’re straight up liars,” he said. “They’ve been in control of the government, all branches of government, for over a decade … when I was in the Legislature, they had no interest. They do not care.”
“They will feign shock and horror but continue to push the money out the door,” he continued. “They care about spending money — they don’t care about accounting for money.”
A 2024 State Auditor report found that California didn’t properly track outcomes for $24 billion spent on homelessness programs. Last year, a scathing court-ordered audit described Los Angeles homeless services as a financial black hole with no accountability or clear outcomes.
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President Donald Trump announced a fraud investigation in California in a Truth Social post on Tuesday, but Essayli said “it’s already happening.”
“There needs to be independent oversight from someone who is not politically connected to these individuals,” he said. “The only people who can do that right now is the federal government — the FBI, the IRS.”
“Everything and anything is on the table,” Essayli said.
The US attorney launched a homeless fraud task force last year that involves the FBI, IRS, the Office of the Inspector General and other federal agencies.
