California’s political establishment is confronting an awkward symmetry: the former chief of staff to the sitting Democratic governor has pleaded guilty to multiple felonies, and the former chief of staff to the Democrat running to replace him has done the same. Both men are awaiting sentencing, according to a report from The Federalist that catalogs a widening series of fraud cases across the state.
The outlet frames the situation as a defining feature of modern California governance, noting that the state is on track to elect back-to-back governors whose former top aides end up in prison. That observation sits atop a pile of recent federal cases that cut across health care, homelessness services and child care.
A $270 Million Medi-Cal Case and a Homeless Services Guilty Plea
In Southern California, Paul Randall was sentenced to 30 years in federal prison after submitting $270 million in fraudulent Medi-Cal claims over an 11-month span, according to the outlet. Medi-Cal is California’s name for its federally funded Medicaid program, which provides health coverage to low-income residents. Several of Randall’s co-defendants in the same ring are still awaiting sentencing.
The same week, in Los Angeles, Alexander Soofer — who operated a chain of homeless services facilities — pleaded guilty in federal court to wire fraud and money laundering, admitting to significant theft of public funds. His plea agreement concedes a personal money judgment of forfeiture against him totaling $1,960,463.39, with additional fines and penalties still possible and a prison term yet to be set. As part of the deal, Soofer is forfeiting his Range Rover, cash found in the vehicle and on his bathroom counter, watches, gold and silver coins, and a Chanel Classic flap bag. The Federalist dryly notes that those interested in Chanel merchandise should watch for a federal auction.
Soofer still faces a list of other felony charges in Los Angeles Superior Court, though those proceedings appear stalled while local prosecutors wait for the federal case to resolve. The Los Angeles County District Attorney’s Office declined to answer questions from The Federalist about the ongoing matter, and Soofer’s lead defense attorney did not respond to the outlet’s inquiries this week.
Arrests on the Same Day, and a Name Directly Linked
On the very day Soofer entered his plea, federal agents were making additional homeless services fraud arrests in Los Angeles. One arrest was directly tied to Soofer: Lakiya Malone, an employee of the nonprofit Special Service for Groups, is accused of creating ghost homeless clients for Soofer’s facilities in exchange for more than $180,000 in bribes and kickbacks, according to the report. The Federalist notes that a week before Malone’s arrest, it had published a piece describing Special Service for Groups as an example of the questionable social services nonprofits operating in the city. The organization did not respond to the outlet’s questions.
Another arrest that same day involved Michael Young, who ran a homeless services nonprofit in Los Angeles and drew more than $118 million in public funds through contracts with the Los Angeles Homeless Services Authority, the City of Los Angeles, the County of Los Angeles, and the U.S. Department of Housing and Urban Development, per the outlet. Among the alleged uses of that money: more than $1 million to open and operate a high-end restaurant and nightclub in Inglewood called Six Seven Five Lounge.
Prosecutor Says the System Was Built to Move Money, Not Track It
Bill Essayli, who leads federal prosecutions in Los Angeles and is described by The Federalist as the most important U.S. Attorney in the country despite not formally holding the title, put the underlying problem bluntly when discussing homeless services fraud with reporters. “There’s no vetting. There’s no auditing. There’s no accounting. It was just a rush to push money out the door,” Essayli said. The Federalist notes the ellipsis in that quote covers a few words Essayli fumbled while speaking.
LAHSA itself is a joint powers agency created by the City and County of Los Angeles to distribute homelessness funding, starting with the Measure H tax increase voters approved in 2017 and later the larger Measure A in 2024. On its website, the agency describes providing funding, program design, outcomes assessment and technical assistance to more than 100 nonprofit partner agencies. The Federalist argues that the sheer number of private entities handling billions in public dollars makes comprehensive tracking of spending and results effectively impossible — essentially the structural condition Essayli described.
Federal Funding Cut, a Mayor’s Pushback, and a Resignation
In June, the Trump administration told LAHSA it would no longer receive federal funding — the same decision the Democrat-dominated Los Angeles County Board of Supervisors had already made. Mayor Karen Bass has consistently characterized federal concerns about fraud in homeless services as cynical and politically motivated, saying in part that the scrutiny amounted to an attack on the city designed to distract from corruption in the Trump administration. “I won’t be bullied,” she said, adding that she would keep working on clearing encampments, housing residents and improving safety.
But Bass subsequently resigned her seat on the commission overseeing LAHSA — a move that came, per the outlet, with remarkable timing, just one week before the latest round of arrests. The Federalist frames the resignation as Bass fleeing ahead of accountability.
As Bass dismissed fraud concerns as politics, LAHSA sued the federal government to try to force continued funding. This week, though, as the new arrests swept the county, the agency backed down: federal officials announced LAHSA had agreed to withdraw from federally funded homeless service roles.
High-Speed Rail and the Wider Picture
The fraud cases are not the only item the outlet highlights. California’s high-speed rail project has spent more than $15 billion so far while laying no tracks, providing no service, and remaining years away from operating any rail lines. Recent coverage of the project, The Federalist notes, has focused on spending for consultants that included sushi, tiki bars and cigar lounges.
The outlet situates all of this inside a state where every top statewide elected office is held by Democrats, who also command supermajorities in both legislative chambers, and where the last Republican governor left office 15 years ago. Its portrait is of a one-party system in which fraud cases accumulate faster than they can be enumerated — from ghost daycares generating hundreds of thousands in income to luxury watches and cars surfaced in investigators’ photos — and where the prosecutions keep arriving like a snowball gaining speed on its way downhill.
Source: thefederalist.com — https://thefederalist.com/2026/09/18/california-spirals-down-into-constant-soul-destroying-fraud/