The Trump administration has cut off federal funding to the Los Angeles Homeless Services Authority amid a widening fraud investigation into one of the country’s largest homelessness agencies.

The Department of Housing and Urban Development said it is immediately suspending LAHSA’s participation in federal programs while HUD’s inspector general investigates possible misconduct involving the agency and its leadership. LAHSA has received nearly $1 billion in federal funding since 2021.

HUD accused the agency of “obvious fraud,” “wanton mismanagement,” conflicts of interest, poor oversight and repeated failures to protect taxpayer dollars. The move comes after years of audits and criticism over Los Angeles homelessness spending, even as tens of thousands of people remain homeless across the county.

The agency cited several findings, including $2.1 million in federal funds that were directed to a nonprofit employing the husband of former LAHSA CEO Va Lecia Adams Kellum. HUD also pointed to a federal judge’s finding that LAHSA committed “obvious fraud” by allegedly seeking funding for an 88-bed shelter while knowing it was operating at about half capacity.

HUD also said LAHSA could not confirm basic records for nearly 2,300 housing sites it was supposed to oversee. A November 2024 audit found the agency left $513 million in homelessness funds unspent, despite the scale of the crisis in Los Angeles.

“Under President Trump’s leadership, HUD will fund results, not corrupt failure or the homeless industrial complex,” HUD Secretary Scott Turner said. The action was also praised by officials tied to the White House fraud task force led by Vice President JD Vance.

Los Angeles city and county officials had already begun moving away from LAHSA before the federal action. Mayor Karen Bass has pointed to recent declines in homelessness as evidence of progress, but also warned that any transition away from LAHSA must avoid disrupting services for unhoused residents.