The Department of Housing and Urban Development suspended all federal funding to Los Angeles’s primary homelessness agency Thursday, citing “obvious fraud,” “wanton mismanagement,” and the repeated failure to safeguard taxpayer money.
HUD sent a letter to the Los Angeles Homeless Services Authority notifying board chair Wendy Greuel and CEO Gita O’Neill that the agency’s participation in federal programs was being immediately halted while HUD’s inspector general investigates potential criminal offenses by LAHSA’s leadership.
LAHSA has received nearly $1 billion in federal funding since 2021. Despite that spending, homelessness in Los Angeles has remained one of the worst in the country.
The White House fraud task force, led by Vice President JD Vance, has been investigating the agency. HUD’s letter to LAHSA’s board detailed a pattern of conflicts of interest, financial mismanagement, and lack of contract oversight.
Among the most serious findings: a federal judge ruled last year that LAHSA committed “obvious fraud” by continuing to request funding for an 88-bed shelter the agency knew was operating at roughly half capacity. The judge also considered placing the agency into receivership.
LAHSA’s former executive director, Va Lecia Adams Kellum, resigned in 2025 after it emerged she had directed $2.1 million in federal funds under LAHSA’s control to her husband’s Santa Monica-based nonprofit. A separate case resulted in a California man being arrested for allegedly stealing millions in homeless funds administered through LAHSA’s network.
The agency also could not verify the existence of nearly 2,300 housing sites it was responsible for overseeing, according to HUD. Seventy percent of the contracts tied to those sites disclosed no expenses over the prior year.
Public audits found LAHSA routinely paid service providers late and lacked the record-keeping to monitor contracts, including $5 million in cash advances sent to five providers with no apparent accountability. In November 2024, Los Angeles’s City Controller found LAHSA had failed to spend $513 million in budgeted public funds during fiscal year 2024, blaming understaffing and outdated technology.
“Suspending LAHSA’s participation in federal government programs is a necessary step in accomplishing that critical mission in Los Angeles,” HUD wrote. “LAHSA’s failures have been so severe and pervasive that Los Angeles County has withdrawn its funding for the agency, and the City of Los Angeles is considering doing so as well.”
HUD Secretary Scott Turner confirmed the action in a statement: “Under President Trump’s leadership, HUD will fund results, not corrupt failure or the homeless industrial complex.”
