Federal prosecutors have opened two criminal cases that reveal how millions of dollars meant to combat homelessness in California may have been siphoned into luxury spending and speculative real estate deals.
The cases, announced Thursday by the U.S. Attorney’s Office in Los Angeles, center on Cody Holmes, the former chief financial officer of the downtown housing developer Shangri-La Industries, and Steven Taylor, a Brentwood-based real estate investor accused of defrauding lenders and flipping a Cheviot Hills property to a homeless housing developer for more than twice his purchase price.
In announcing the charges, Acting U.S. Attorney Bill Essayli said, “Accountability for the misuse of billions of tax dollars intended to combat homeless starts today. The two criminal cases announced are only the tip of the iceberg, and we intend to aggressively pursue all leads.”
Holmes, 31, allegedly submitted fake bank records to the state Department of Housing and Community Development to secure $25.9 million in grant money through the state’s Homekey program. The money was supposed to convert a Thousand Oaks property into homeless housing. Instead, prosecutors say, Holmes diverted more than $2.2 million to pay off personal American Express bills, which included luxury purchases at high-end retailers. Federal investigators believe Holmes fabricated balance sheets and bank statements showing $160 million in nonexistent funds to convince the state that Shangri-La had the capacity to deliver on its promises.
Taylor, 44, was charged with seven counts of bank fraud, one count of identity theft, and one count of money laundering. Prosecutors say he lied to lenders about his intent to occupy a senior housing facility he purchased in Cheviot Hills for $11.2 million, then quickly resold it for $27.3 million to the Weingart Center Association, which used state and city homelessness funds to acquire the property. The double-escrow deal, kept hidden from the lender, allegedly enriched Taylor by millions at taxpayer expense.
Federal officials emphasized that both cases mark the beginning of a broader crackdown. “We’re looking at everyone,” Essayli said. “If you steal money or allow it to be stolen, we will find you, and we will prosecute you.”
Shangri-La Industries, the developer at the heart of the Holmes case, is no stranger to controversy. The company was one of the largest recipients of Homekey funding, securing roughly $114 million to turn motels across California into permanent housing. Several of those projects remain incomplete or in foreclosure. The firm’s CEO, Andrew Abdul-Wahab, who is known professionally as Andy Meyers, has also been under civil scrutiny by the state attorney general for breach of contract and misuse of public funds.
Political records show that Meyers and other Shangri-La executives cultivated close ties with local politicians across Los Angeles. In June 2023, both Meyers and Shangri-La development manager Skyler Modrzejewski made the maximum $900 contributions allowed to Councilmember Traci Park. Both listed Shangri-La as their employer.
The donations came only weeks after Park appeared alongside Meyers at a ribbon cutting for two new supportive housing buildings for homeless veterans on the West Los Angeles VA campus, a project built by Shangri-La in partnership with Step Up on Second and the U.S. Department of Veterans Affairs. Park, whose district includes the VA property, praised the collaboration as a model for addressing homelessness, calling it “the perfect example of what it takes to ensure that every veteran in need has a place to live with the supportive services that he or she needs.”
The federal Homelessness Fraud and Corruption Task Force, which includes the FBI, IRS Criminal Investigation, and the Federal Housing Finance Agency’s inspector general, has pledged to pursue any misuse of homelessness funds and to hold all involved parties accountable. For now, the allegations against Holmes and Taylor cast a shadow over California’s ambitious homelessness programs and the political networks intertwined with them.