A pair of Los Angeles developers were arrested in separate cases for allegedly misusing tens of millions of dollars in grant money meant to help the homeless — and former Democratic state Sen. Kevin Murray’s foundation has been linked to the new allegations, prosecutors announced Thursday.
Property flipper Steven Taylor, 44, was arrested for repeatedly fudging his financials to get loans and lying about how he would use a Cheviot Hills property that he sold to the Murray’s non-profit Weingart Center for $27.3 million, Los Angeles US Attorney Bill Essayli announced Thursday.
Weingart used funding from the City of LA, as well as from the state’s Department of Housing and Development, that was meant to help the homeless to purchase Taylor’s property less than two weeks after he bought it.
It had been a senior living facility, according to a report by the Westside Current.
Los Angeles federal prosecutor Bill Essayli announced the arrests of two businessmen accused in separate cases of misusing funding meant for the homeless. U.S. Attorney’s Office for the Central District of California
Murray has not been charged in the case, but his non-profit is part of an ongoing investigation.
Essayli said the investigation would not shy away from prosecuting any politicians they may discover have misused these funds. He said Thursday’s arrests were “just the beginning.”
“We’re looking at everyone,” the US attorney warned.
Taylor, of Brentwood, is charged with defrauding lenders with fake bank statements to get loans to buy properties for his flipping business. And he also allegedly lied about what he would use the properties for, the feds claim.
He allegedly claimed he would renovate the Cheviot Hills property and live in it when he applied for the loan to buy it. But instead, he sold it soon after buying it for $16 million more than his purchase price to Weingart, the feds say.
Taylor’s was one of two arrests made Thursday, with Cody Holmes being charged in an unrelated case for siphoning homeless housing grant money to pay off credit card bills for luxury purchases, the feds allege.
Holmes, 31, the former finance chief of Shangri-La Industries LLC, helped the company win $25.9 million in funding to build homeless housing in Thousand Oaks but then stole some of the money for himself, Essayli claimed.
Essalyi said the investigation was ongoing and said he wouldn’t shy away from prosecuting politicians if he found out they had stolen public funds. U.S. Attorney’s Office for the Central District of California
The Department of Housing and Community Development in October 2022 awarded the company the funds, after Holmes submitted bogus bank records showing the company had assets of $160 million, the feds claim.
In reality, the bank accounts were fake and the company didn’t have the millions they claimed to have, prosecutors said.
Holmes, of Beverly Hills, submitted the fake records in a bid to secure the grant by showing the company had the capacity to carry out a project to build new homeless housing in Thousand Oaks, prosecutors claim.
He transferred $2.2 million of the funds into his personal account and used $2 million to pay off American Express charges from November 2022 to May 2023, the feds claim.
The Amex charges were from “well-known luxury retailers,” according to criminal court papers.
“These payments were at least in part for Holme’s benefit,” the filing alleges.
Prior to the scheme, Shangri-La had already won millions of dollars in grant money for homeless housing in Redlands, King City and other cities around California, the feds say.
Holmes faces up to 20 years imprisonment if convicted, and Taylor faces up to 30 years behind bars if convicted. Holmes was scheduled to appear in court on Thursday, while Taylor was expected to appear in court sometime in the coming weeks.
Murray and Weingart didn’t immediately return requests for comment. It wasn’t immediately known who was representing Taylor and Holmes.