Two SoCal Men Hit with Federal Charges in Separate Homeless Housing Fraud Cases

CALIFORNIA – The U.S. Department of Justice (DOJ) announced October 16 the arrest of a former chief financial officer of a downtown Los Angeles affordable housing developer.

They also filed criminal charges against a Brentwood man accused of defrauding lenders to support his property-flipping business, including the sale of a Cheviot Hills home to a homeless housing developer for more than twice its purchase price.

“The two criminal cases announced is only the tip of the iceberg and we intend to aggressively pursue all leads and hold anyone who broke any federal laws criminally liable,” Acting United States Attorney Bill Essayli said.

Beverly Hills man received $25.9 million homeless housing grant

Cody Holmes, 31, of Beverly Hills, was arrested on a federal mail fraud charge, which carries a maximum sentence of 20 years in prison.

Holmes is set to appear this afternoon in U.S. District Court in downtown Los Angeles, where no plea will be entered.

According to the affidavit, in October 2022 the California Department of Housing and Community Development (HCD) paid about $25.9 million in Homekey grant funds to Shangri-La Industries LLC, a downtown Los Angeles affordable housing developer.

The grant required the funds to be used for purchasing, building, and operating homeless housing in Thousand Oaks.

These payments came after HCD had already provided millions to Shangri-La for homeless housing projects in Redlands, King City, and other California cities.

As Shangri-La’s CFO, Holmes knowingly submitted fake bank records to HCD claiming the company controlled about $160 million to demonstrate it could fund homeless housing projects, including Thousand Oaks.

In reality, those accounts did not exist.

Paid for high-end luxury items with grant funds

Holmes and Shangri-La also provided HCD with balance sheets falsely showing millions in cash that the affiliated entities did not actually hold.

They submitted the fake statements with the intent that HCD would rely on them and release grant funds.

After receiving the falsified documents, HCD disbursed millions more in grant funds to Shangri-La, including for the Thousand Oaks project.

Some Homekey funds paid to Shangri-La were used to cover American Express credit card bills linked to Holmes. In November and December 2022, over $2.2 million was transferred from a Shangri-La account to one controlled by Holmes.

From November 2022 to May 2023, over $2 million was used to pay American Express cards. The credit card charges included purchases at high-end luxury retailers. Authorities believe the payments were made, at least in part, for Holmes’s personal benefit.

Brentwood man sold property to homeless housing developer for double the price

Steven Taylor, 44, of Brentwood, faces seven counts of bank fraud, one count of aggravated identity theft, and one count of money laundering.

Taylor, free on a $3.6 million bond, is expected to be arraigned on the superseding indictment in U.S. District Court in downtown Los Angeles in the coming weeks.

The indictment alleges that from August 2019 to July 2025, Taylor used fake bank statements and false cash claims to secure loans and credit for his real estate business.

Fraud proceeds were used by Taylor to acquire or refinance properties in Los Angeles neighborhoods including Silver Lake, Los Feliz, Westlake, Del Rey, Pico-Union, and Cheviot Hills.

Taylor is also charged with misleading lenders about his intended use of properties, including falsely telling the lender for his Cheviot Hills purchase that he planned to renovate and occupy it himself.

In reality, Taylor had already agreed to sell the Cheviot Hills property—originally bought for $11.2 million with a loan based on fake bank statements—to a homeless housing developer for $27.3 million using public funds, in a double-escrow deal concealed from the lender.

Taylor also secured and maintained lines of credit using fake bank statements and false cash claims, including a $3 million unsecured line from “Lender B” and a $1 million unsecured line from “Lender C.”

He is also accused of misleading Lender B when opening the $3 million line, falsely claiming he had closed his $1 million line with Lender C.

He allegedly fabricated and sent a document claiming to be an email from a Lender C employee, falsely confirming the credit line was closed.

In reality, Taylor kept his Lender C line open and drew from it even after opening the $3 million line with Lender B, and the email from Lender C was forged.

The fake bank statements, false cash claims, and misrepresented liabilities were material to lenders’ decisions to approve and maintain Taylor’s loans and lines of credit.

Taylor used the fraudulently obtained lines of credit to make down payments on properties also purchased with fraudulent loans.

Faces up to 30 years in prison

If convicted, Taylor faces up to 30 years in federal prison per bank fraud count, 10 years for the money laundering count, and a mandatory consecutive two-year sentence for aggravated identity theft.