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wo separate federal cases were announced Thursday involving the misuse of California’s Homekey program, which converts properties into affordable housing for the homeless. The cases target a former chief financial officer of a downtown Los Angeles developer and a Brentwood businessman, both accused of defrauding lenders and diverting grant money for personal gain.
**Cody Holmes, 31, former CFO of Shangri‑La Industries**
Holmes was arrested on a mail‑fraud charge tied to the $25.9 million Homekey grant paid to Shangri‑La for a homeless‑housing project in Thousand Oaks, Ventura County. Prosecutors say he submitted fabricated bank statements to the California Department of Housing and Community Development, claiming the company held $160 million in accounts that did not exist. The false documents also alleged that Shangri‑La‑affiliated entities had millions in cash, prompting the state to release additional grant funds for the unfinished Thousand Oaks project.
Court filings reveal that Holmes transferred more than $2.2 million from a Shangri‑La account to a personal account in 2022, and then used over $2 million to pay American Express credit cards for luxury purchases, including a $35,000 Audemars‑Piaget watch and a $16,839 Birkin bag for his girlfriend. Holmes is scheduled to appear in federal court in downtown Los Angeles this afternoon; a conviction could bring decades in prison.
**Steven Taylor, 44, Brentwood real‑estate developer**
Taylor faces seven counts of bank fraud, one count of aggravated identity theft and one count of money laundering. According to the indictment, he fabricated bank statements and cash records to secure loans and lines of credit that financed the acquisition and refinancing of properties in Silver Lake, Los Feliz, Westlake, Del Rey, Pico‑Union and Cheviot Hills. Taylor allegedly used Homekey funds to purchase luxury items for his girlfriend and to pay off credit cards. He also sold a Cheviot Hills property to nonprofit Weingart Center after securing state funding for the purchase.
Taylor is out on a $3.6 million bond and is expected to be arraigned in the coming weeks. If convicted, he faces a lengthy federal sentence.
**Official statements**
U.S. Attorney Bill Essayli emphasized that accountability for the misuse of billions of tax dollars earmarked for homelessness begins today, noting that the two cases are only the “tip of the iceberg.” The FBI’s Los Angeles bureau, led by Assistant Director Akil Davis, reaffirmed its commitment to the Homelessness Fraud & Corruption Task Force, aiming to build cases against offenders. Mayor Karen Bass declared zero tolerance for corruption, pledging full cooperation with the U.S. Attorney’s office to prosecute any fraud against the city.
**Additional context**
The All‑Star Lodge motel in San Bernardino, one of several Homekey properties in foreclosure, illustrates the broader impact of the program’s vulnerabilities.
City News Service contributed to this report. © 2025 KABC Television, LLC. All rights reserved.
