Two developers from Los Angeles were taken into custody in separate incidents for allegedly misappropriating millions in grant funds intended for homeless assistance. Former Democratic state Senator Kevin Murray’s foundation is tied to these allegations, as officials revealed on Thursday.
Steven Taylor, a 44-year-old property trader, was apprehended for allegedly submitting fraudulent financial statements to secure loans and misrepresenting the intended use of a Cheviot Hills property he sold to Murray’s non-profit, the Weingart Center, for $27.3 million, according to Los Angeles U.S. Attorney Bill Essayli.
The Weingart Center utilized funding from both the City of Los Angeles and the state’s Department of Housing and Development, designated to assist the homeless, to acquire Taylor’s property less than two weeks after he had purchased it.
Previously, the property functioned as a senior living community, as reported by the Westside Current.
While Murray has not been charged, the investigation into his non-profit is ongoing.
Essayli mentioned that the investigation aims to hold accountable any political figures implicated in the misuse of these funds, stating that Thursday’s arrests mark a potential starting point.
“We are examining everyone involved,” the U.S. attorney cautioned.
Taylor, from Brentwood, faces charges of committing fraud against lenders by submitting counterfeit bank records to secure loans for his property investment business. Additionally, he allegedly misrepresented his intentions for the properties, according to federal claims.
When seeking financing to acquire the Cheviot Hills property, he had stated plans for renovation and personal residence; however, he later sold it for $16 million more than he had paid to Weingart shortly after his acquisition, according to prosecutors.
Thursday also saw the arrest of Cody Holmes, charged in a separate case for rerouting funds intended for homeless housing grants towards personal debts and luxury expenditures, as the government states.
31-year-old Holmes, former financial officer of Shangri-La Industries LLC, contributed to the company’s acquisition of $25.9 million in funding for a homeless housing project in Thousand Oaks, but allegedly misappropriated portions of that funding for his own gain, Essayli contended.
In October 2022, the Department of Housing and Community Development granted funding to the company after Holmes presented falsified bank statements claiming the company possessed $160 million in assets, according to federal authorities.
In actuality, the alleged bank records were fabricated, and the company lacked the claimed financial resources, as stated by prosecutors.
Holmes, residing in Beverly Hills, allegedly submitted these fraudulent documents to secure the grant, asserting the company had the capacity to execute the proposed homeless housing project in Thousand Oaks.
He reportedly funneled $2.2 million of the awarded funds into his own account and allocated $2 million for settling American Express bills incurred from luxury shopping between November 2022 and May 2023, according to federal claims.
These American Express expenses were tied to “well-known luxury retailers,” as detailed in the criminal filings.
The filings assert that “these payments were partially for Holmes’ personal benefit.”
Before this alleged scheme, Shangri-La had already secured millions in grants for homeless housing projects in Redlands, King City, and other locations throughout California, according to federal sources.
If found guilty, Holmes could face a maximum sentence of 20 years in prison, while Taylor may be sentenced to 30 years. Holmes was set to appear in court on Thursday, while Taylor is expected to be arraigned in the coming weeks.
Requests for comments from Murray and Weingart went unanswered. It is unclear who is representing Taylor and Holmes at this time.
