Trump HUD Suspends Funding To Los Angeles Homeless Agency Amid Fraud Probe

The Trump administration is freezing federal funding to Los Angeles Homeless Services Authority after accusing the agency of “obvious fraud,” rampant financial mismanagement and repeated failures to protect taxpayer dollars.

The Department of Housing and Urban Development, led by Scott Turner, informed LAHSA leadership that the agency’s participation in federal housing programs was being immediately suspended while HUD’s inspector general investigates potential wrongdoing.

According to a letter obtained by Fox News Digital, HUD accused the agency of conflicts of interest, fraud, lack of oversight and widespread operational failures tied to Los Angeles’ sprawling homelessness bureaucracy.

“Suspending LAHSA’s participation in federal government programs is a necessary step in accomplishing that critical mission in Los Angeles,” HUD wrote in the letter.

The move places one of the nation’s largest homelessness agencies under direct federal scrutiny after years of criticism over ballooning spending and worsening street conditions across Los Angeles.

HUD says LAHSA has received nearly $1 billion in federal funding since 2021 alone.

The agency has already faced mounting pressure locally, with both city and county officials weighing efforts to restructure or take over parts of the organization amid growing public frustration over the homelessness crisis.

HUD pointed to several major controversies in its letter, including the resignation last year of former LAHSA executive Va Lecia Adams Kellum after allegations that $2.1 million in federal funds under the agency’s control were directed to a nonprofit tied to her husband.

Federal officials also cited a judge’s finding last year that LAHSA engaged in “obvious fraud” after allegedly continuing to seek funding for an 88-bed shelter despite knowing the facility was operating at roughly half capacity.

According to HUD, the judge even considered placing the agency into receivership.

The letter further alleged that LAHSA could not verify the existence of nearly 2,300 housing sites under its oversight.

HUD said roughly 70% of contracts tied to those sites failed to disclose any expenses over the prior year.

The investigation is unfolding as Vice President JD Vance’s White House fraud task force ramps up scrutiny of government-funded programs nationwide.

Federal officials say the crackdown is focused on rooting out waste, abuse and corruption involving taxpayer-funded grants and emergency relief programs.

Since 2021, LAHSA received $1 billion while homelessness skyrocketed and fraud ran rampant.

Our message to the homelessness industrial complex: If you are doing something fraudulent, you are on notice. pic.twitter.com/agjJC4DexB

— Scott Turner (@SecretaryTurner) June 11, 2026