Bombshell evidence White House fraud squad found before snatching funding for LA’s largest homeless agency

The White House pulled federal funding from Los Angeles’ largest homeless agency after discovering a bombshell audit that showed millions of dollars in missing public funds, The California Post has learned.

The Trump administration’s new task force on fraud announced Thursday it was halting any more cash going to Los Angeles Homeless Services Authority.

The office, led by Vice President JD Vance, said it was part of a wider crackdown on “fraud and corruption” that they have consistently leveled against California.

It also comes amid a wider fight between the White House and the Golden State over the recent elections, with officials claiming they were “rigged” after Spencer Pratt was dumped out.

Thursday’s crackdown was sparked by a 2024 audit of tens of millions in taxpayers’ cash that was sent to LASHA to pass on to homeless agencies.

Out of the $50.79 million it was handed, the agency could only account for $13.78 million, meaning nearly just over $37 million was unaccounted for.

The figures only came to light after a yearslong lawsuit from LA Alliance for Human Rights — made up of homeowners, businesses and homeless people — seeking to find where the cash was going in 2020.

The Department of Housing and Urban Development, or HUD, which worked with the fraud task force, told The Post the example reflects an astonishing pattern of failures by LAHSA.

“LAHSA’s record of fraud, failure, and flagrant mismanagement has abused hundreds of millions of tax dollars per year,” Secretary Scott Turner said in a statement.

“This action directly threatens the housing stability of Angelenos who are housed right now because of this funding, with no plan to ensure they don’t end up back on our streets.

“This is exactly what I have been concerned about, and why I have pushed for years for the City to build the capacity to manage our own contracts, programs and dollars.”

The $50 million figure was part of a wider review of $2.3 billion in homeless spending in Los Angeles, which was ordered by US District Judge David O. Carter in 2024.

The advances were supposed to help providers pay for homeless services they did not have the money for at the time, and were expected to be paid back.

Among the worst offenders were People Assisting the Homeless, or PATH, which had $8.23 million in unrecovered advances; LA Family Housing, which had $4.5 million; and Volunteers of America Los Angeles owed $3.42 million.

Meanwhile, Venice-based St. Joseph Center had about $2.5 million in unrecovered advances. The CEO of LAHSA during the time of the advances, Va Lecia Adams Kellum, had also previously run the center.

In a suspension letter issued Thursday, the federal government specifically mentioned Adams Kellum and a nonprofit that employed her husband in a senior role.

LAHSA is accused of approving more than $2.1 million in federal funding for his organization without obtaining a required conflict-of-interest waiver.

Federal officials allege their relationship was not disclosed and that Adams Kellum.

Adams Kellum, who was on just under $500,000 per year, resigned last year after the federal government started asking questions about her dealings with her husband.

Much of the city’s homelessness spending is overseen by the Los Angeles City Council’s Homelessness and Housing Committee, chaired by mayoral candidate Nithya Raman.

The committee reviews homelessness contracts, funding allocations, performance reports and policy recommendations before they advance through City Hall.

Asked about HUD’s decision, a spokesperson for Raman told The Post the suspension risks harming vulnerable residents who rely on federally funded housing programs.

The Post also asked the Department of Justice whether any of the findings outlined in HUD’s suspension letter had resulted in criminal investigations.

A spokesman said: “Per DOJ policy, we can neither confirm nor deny the existence of investigations.”

The department previously filed criminal charges against Westwood businessman Alexander Soofer, who prosecutors accused of stealing more than $23 million intended for homelessness programs.

A spokesperson for Mayor Karen Bass issued a statement saying, “Mayor Bass, too, has grave concerns about LAHSA and zero tolerance for mismanagement and negligence, which is why she previously directed the City to evaluate how to move away from the agency.

“Threatening federal funds does nothing to house people and jeopardizes the progress Mayor Bass has led to reduce homelessness for two years in a row, after it only went up in Los Angeles for years. Ultimately people will lose their lives. We urge HUD to work with the City of Los Angeles to provide the necessary funding to reduce homelessness.”

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