‘Gross Misuse of Federal Funding’: Trump Admin Blocks Payments to ‘Obviously Fraudulent’ Los Angeles Homeless Agency

The Department of Housing and Urban Development under President Donald Trump announced an “immediate suspension” on all funding to the Los Angeles Homeless Services Authority, citing a “clear pattern of fraud.”

“Year after year, hundreds of millions of taxpayer dollars were funneled to LAHSA with little accountability,” HUD Secretary Scott Turner said in statement Thursday. “Meanwhile, homelessness skyrocketed. Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve.”

The New York Post reported in March that taxpayers are paying up to $1.5 million per homeless person in Los Angeles. This amount is nearly eight times larger than the average 50-year-old’s retirement fund and more than 20 times larger than the average 35–39-year-old’s retirement fund, per Fidelity Investments reporting.

While much of these funds are sourced from the city and county of LA, nearly $1 billion in federal taxpayer dollars have gone toward LAHSA since 2021.

Despite this, homelessness in LA has doubled since 2013.

The HUD press release cites multiple instances that the agency claims “establish a clear pattern of fraud,” including poor financial management and internal controls, conflicts of interest, and false certifications and statements.

“During a 2025 assessment, LAHSA failed to provide documentation to verify the existence of nearly 2,300 housing sites for which it was responsible,” the press release said. “The agency’s former CEO resigned after she and LAHSA violated federal conflict-of-interest rules by committing more than $2 million in federal funds under LAHSA’s control to her husband’s employer.”

Despite the increase in homelessness, some of the LAHSA shelters remain merely half-full, the letter states.

Los Angeles Mayor Karen Bass criticized the Trump administration’s move to defund LAHSA. While she admitted she had concerns about the agency, she stated that these federal cuts do “nothing to house people.”

“Ultimately, people will lose their lives,” Bass claimed.

The letter, however, states that the agency “cannot ignore” the blatant fraud.

“Turning over billions of dollars from American taxpayers to an organization under investigation and suspected of gross misuse of federal funding and ‘obvious fraud’ does nothing to reduce homelessness,” the letter states. “Indeed, diverting dollars from worthy programs to LAHSA merely makes the homeless crisis worse.”