California Spirals Down Into Constant, Soul-Destroying Fraud

In California, the former chief of staff to the current Democrat governor has pled guilty to a bunch of felonies and is awaiting sentencing. At the same time, the former chief of staff to the Democrat running to replace the current governor has also pled guilty to a bunch of felonies and is also awaiting sentencing. California has a serious shot at choosing back-to-back governors whose former top staff members will go to prison for fraud. We stack and cluster the fraud among public officials, so the headlines about fraud convictions need subheds about related fraud defendants:

The former chief of staff who’s pleading guilty is linked to the former chief of staff who pleaded guilty. Fraud is California’s new normal, the old joke about the two fish: First fish says that the water’s cold today, and the second fish says, “What’s water?” Fraud is California, and California is fraud. If you throw a rock in California you’ll hit some fraud, but it’s also probably only a matter of time before the rock is also indicted.

This explosive decompression in the culture of the state is taking place in an atmosphere of consistent single-party rule. Every top statewide elected office is held by Democrats, and Democrats have supermajorities in both houses of the state legislature. The last Republican governor left office fifteen years ago.

This is California:

That’s it. That’s what years of Governor Gavin Newsom, Attorney General Rob Bonta, and Mayor Karen Bass and others like her gets you. The news about fraud arrests and convictions is beginning to resemble a snowball as it nears the bottom of the hill. Fraud everywhere, fraud all the time, fraud as the local culture.

In Southern California, Paul Randall has just been sentenced to 30 years in federal prison after he submitted $270 million in fraudulent Medi-Cal claims – Medi-Cal is what California calls its federally funded Medicaid program, government health insurance for the poor – over the course of 11 months. Several co-defendants are awaiting sentencing in the same fraud ring.

The schemes are becoming preposterous, sliding into the very late stage when people just turn to mass pillaging in a dying system. There’s an odor to Weimar California, the scent of obscene decadence. It’s the place where people know they live in an atmosphere of depravity.

This week in Los Angeles, the operator of a chain of homeless services facilities pled guilty to wire fraud and money laundering in federal court, acknowledging the significant theft of public funds. His name is Alexander Soofer, and his plea bargain agreement concedes that he owes the government “a personal money judgment of forfeiture against defendant in the amount of $1,960,463.39,” with further fines and penalties possible in addition to a prison sentence that has yet to be determined. He’s also forfeiting his Range Rover, the cash federal agents found in the Range Rover and on his bathroom counter, some watches, gold and silver coins from his closet at home, and (among several other available examples of luxury goods) a “Chanel Classic flap bag.” If you’re into Chanel stuff, look for the federal auction.

Soofer still faces a long list of other felony charges in Los Angeles Superior Court, though those charges appear to be stalled as local prosecutors have apparently waited for the outcome in the federal case. The Los Angeles County District Attorney’s Office declined to answer questions from The Federalist about the ongoing case, and Soofer’s lead defense lawyer didn’t respond to questions from The Federalist this week.

On the same day Soofer was agreeing to plead guilty, federal agents were out making more homeless services fraud arrests in Los Angeles. Among those arrests was one directly linked to Soofer: Lakiya Malone, an employee of the non-profit Special Service for Groups, is charged with creating “ghost” homeless clients for Soofer’s facilities, and “taking more than $180,000 in bribes and kickbacks” from Soofer in exchange. (On Sept. 9, a week before that arrest, a story at The Federalist described Special Service for Groups as an example of the kind of questionable social services non-profits that are destroying Los Angeles. They also didn’t respond to our questions.)

From the same day of new arrests, here’s how Michael Young made out from running a homeless services non-profit in Los Angeles, taking in a bunch of cash from the Los Angeles Homeless Services Authority (LAHSA) and many other government agencies: “Through numerous contracts with LAHSA and other public entities, Young received more than $118 million in public funds from LAHSA, the City of Los Angeles, the County of Los Angeles, and the United States Department of Housing and Urban Development.”

Sample alleged use of those public funds for homeless services: “Young spent more than $1 million to open and operate a high-end restaurant and nightclub in Inglewood called Six Seven Five Lounge.”

Bill Essayli, who leads federal prosecutors in Los Angeles, is becoming the most important U.S. Attorney in the country, despite not formally being a U.S. Attorney. Discussing homeless services fraud with the news media this week, Essayli said the obvious: “There’s no vetting. There’s no auditing. There’s no accounting. It was just a rush to push … money out the door.” (The ellipsis just covers some awkward extra words, as Essayli fumbled with his phrasing.)

LAHSA is a joint powers agency, formed by the City of Los Angeles and Los Angeles County to channel a flood of homelessness cash from Measure H, a tax increase measure passed by voters in 2017, and then Measure A, a larger tax increase passed in 2024. On its website, LAHSA boasts about the size of the county’s homelessness NGOcracy:

“Through LAHSA, funding, program design, outcomes assessment, and technical assistance are provided to more than 100 nonprofit partner agencies that assist people experiencing homelessness achieve independence and stability in permanent housing.” One county, one function, over 100 nonprofits.

The fraud is in the form. Prosecutors and journalists catch individuals stealing social services funding, but the structure of a system in which billions of public dollars flow through hundreds of private corporations guarantees that no one can track all of the spending and all of the outcomes. “There’s no vetting. There’s no auditing. There’s no accounting.” Now you know why.

In June, the Trump administration informed LAHSA that it would no longer receive federal funding, a move that put a Republican president second in line behind the similar defunding decision made by the 80 percent-Democrat Los Angeles County Board of Supervisors. The halfwit mayor of Los Angeles has consistently framed federal concerns about fraud in homeless services as cynical and unwarranted political attacks:

But then, with remarkable timing, Bass resigned her seat on the commission that oversees LAHSA, and she did it a week before the latest round of arrests. She fled ahead of the arrival of accountability.

As Bass falsely described concerns about fraud and poor financial controls in homelessness spending as mere politics, LAHSA itself sued the federal government to force the Trump administration to continue to fund the agency. This week, though, as the new wave of fraud arrests swept through the county, LAHSA gave up: Federal officials announced that the agency had agreed to withdraw from federally funded homeless service roles.

While homeless services and fake childcare descend into the darkly comical realm of constant, massive fraud, California’s high-speed rail system has spent over $15 billion so far, but has no trains, provides no service, has laid no tracks, and is still years away from having any functioning rail lines. The news about the project this week has focused on the sushi, tiki bars, and cigar lounges that high-speed rail has covered for consultants on the project.

While California spirals down into constant, soul-destroying fraud that shows up everywhere and in everything, note as a finishing thought that Governor Gavin Newsom’s communications staff opened the year by mocking the idea that the Trump administration would ever find any fraud in the state:

Newsom’s press office posted the claim that Trump could find no evidence of fraud in California about three months before Newsom’s former chief of staff pled guilty to federal fraud charges.

Chris Bray is a senior correspondent at The Federalist and a former infantry sergeant in the U.S. Army. He has a history PhD from the University of California Los Angeles, not that it did him any good. He also posts on Substack, at “Tell Me How This Ends,” here.