U.S. Attorney Essayli called the cases “the tip of the iceberg,”. The investigations fall under a new task force to scrutinize California’s $24 billion homelessness spending
Federal authorities arrested a Beverly Hills man and charged a Brentwood resident Thursday in separate cases alleging the misuse of public funds intended to combat homelessness in Los Angeles. The actions mark the beginning of a broader probe into the allocation of billions in taxpayer money.
Cody Holmes, 31, former chief financial officer of Shangri-La Industries LLC, a downtown L.A.-based affordable housing developer, was arrested on a mail fraud charge. The felony carries a potential 20-year prison sentence. Holmes is accused of submitting falsified bank records and balance sheets to the California Department of Housing and Community Development (HCD) to secure a $25.9 million Project Homekey grant in October 2022 for a Thousand Oaks motel conversion. Investigators allege the accounts cited, supposedly holding $160 million, were nonexistent, and some grant funds were diverted to pay over $2 million in Holmes’ American Express bills, including luxury retail purchases, between November 2022 and May 2023. He is scheduled for an initial court appearance in downtown Los Angeles.
In a separate case, Steven Taylor, 44, faces a nine-count superseding indictment including seven counts of bank fraud, one count of money laundering, and one count of aggravated identity theft. Already free on a $3.6 million bond, Taylor is alleged to have used fake bank statements to obtain loans and lines of credit from 2019 to 2025, amassing properties across L.A. neighborhoods like Cheviot Hills. Prosecutors say he bought a Cheviot Hills home for $11.2 million with a fraudulent loan, then sold it to a homeless housing developer for $27.3 million using public funds, pocketing a $16.1 million profit. Taylor also allegedly forged documents to maintain multiple credit lines, facing up to 30 years per bank fraud count if convicted, plus a mandatory two-year term for identity theft.
Acting U.S. Attorney Bill Essayli called the cases “the tip of the iceberg,” signaling aggressive pursuit of further leads. The FBI’s Akil Davis and IRS’s Tyler Hatcher emphasized the impact on vulnerable populations, while the Federal Housing Finance Agency’s Herminia Neblina highlighted coordination with law enforcement partners.
The investigations fall under the Homelessness Fraud and Corruption Task Force, formed in April to scrutinize California’s $24 billion homelessness spending since 2020.