OAN Staff Lillian Mann
6:00 PM – Thursday, June 11, 2026
The Department of Housing and Urban Development (HUD) has suspended all federal funding to the Los Angeles Homeless Services Authority effective immediately, placing one of the nation’s largest homelessness bureaucracies under unprecedented federal scrutiny.
The immediate freeze on future grants and procurement programs follows a sweeping review by a White House fraud task force co-chaired by Vice President JD Vance. According to formal notices, the administration accused the agency of “wanton mismanagement” regarding its oversight of nearly $1 billion in federal funds distributed since 2021.
Federal officials cited a pattern of repeated failures to safeguard taxpayer dollars as the core justification for the freeze, which will remain in place while the HUD inspector general conducts a thorough investigation into potential operational and financial offenses.
The federal intervention heavily leverages a recent rebuke from U.S. District Judge David O. Carter, who publicly called out “obvious fraud” during a federal court hearing oversight process. That judicial reprimand centered on a South Los Angeles shelter site where LAHSA reportedly continued to seek and distribute full financial support for an 88-bed facility despite being fully aware that the site had been operating at half capacity for over a year.
This specific funding discrepancy, combined with broader ongoing investigations into executive conflicts of interest and multi-million-dollar non-profit vendor scams within the network, prompted federal authorities to declare that they could no longer ignore the systemic misuse of public money.
While LAHSA officials have pushed back against the decision — describing the freeze as a politically motivated withdrawal of vital regional resources — the move exemplifies a growing local and national exhaustion with West Coast homelessness initiatives.
Despite billions of dollars in public spending over recent years, visible homelessness, sprawling street encampments and severe municipal sanitation crises have continued to intensify across Los Angeles, triggering both this federal crackdown and parallel efforts by local county supervisors to strip authority away from the embattled agency.
“Suspending LAHSA’s participation in federal government programs is a necessary step in accomplishing that critical mission in Los Angeles,” HUD wrote in a letter obtained by Fox News Digital. “LAHSA’s failures have been so severe and pervasive that Los Angeles County has withdrawn its funding for the agency, and the City of Los Angeles is considering doing so as well.”
Last year, former top executive of LAHSA, Va Lecia Adams Kellum, stepped down from the position after she was caught sending more than $2.1 million in federal funds under LAHSA’s control to her husband’s nonprofit employer in Santa Monica.
According to HUD, the City Controller’s Office also reported in November 2024 that LAHSA left $513 million in fiscal year 2024 public funds unspent, citing staffing shortages and outdated technology as contributing factors.
“Under President Trump’s leadership, HUD will fund results, not corrupt failure or the homeless industrial complex,” HUD Secretary Scott Turner said in a statement to Fox News Digital. “Year after year, hundreds of millions of taxpayer dollars were funneled to LAHSA with little accountability. Meanwhile, homelessness skyrocketed. Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve.”
Federal Trade Commission Chairman Andrew Ferguson, vice chair of the White House Task Force to Eliminate Fraud, credited HUD Secretary Scott Turner, President Donald Trump and Vance for their leadership on the issue.
“Los Angeles didn’t care about helping the homeless, but the Trump Administration does,” Ferguson told Fox News Digital. “It is unconscionable that Los Angeles has wasted billions of taxpayer dollars that was supposed to be used on housing our nation’s most vulnerable. Instead of providing a roof and care for the homeless, Los Angeles has used these funds to line the pockets of left-wing NGOs. Such a disgrace ends today.”
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