In October, federal agents arrested Cody Holmes, the 31-year-old former CFO of Shangri-La Industries, a downtown Los Angeles-based developer who was supposed to be providing housing for homeless people in Southern California. First Assistant U.S. Attorney Bill Essayli for the Central District of California, a Trump appointee, charged him with mail fraud.
Holmes, who pleaded not guilty, is accused of embezzling more than $2 million in taxpayer funds slated for homeless housing construction to host extravagant parties; a $46,000-per-month Beverly Hills mansion; private jet travel; leases of exotic cars; high-end handbags totaling $128,000; a $35,000 diamond watch; and 20 VIP passes for the 2023 Coachella Music and Arts Festival.
Meanwhile, Shangri-La Industries executives showered Newsom and Los Angeles County Democrats with political donations as they were applying for some $100 million in state contracts that the CFO later allegedly looted to fund his and his ex-girlfriend’s lavish lifestyle.
Even after federal prosecutors exposed the massive fraud, Newsom and L.A. Democrats haven’t severed ties with the embattled developer and have kept political donations from the firm’s executives. Newsom has also allowed the construction firm to continue to tout his endorsement on its social media.
I support the government providing some level of assistance for those in need of basic shelter, food, medical care, and clothing. This need not be overly generous; we can meet basic needs without making the system dangerously attractive for those too lazy to work. Advocates of the welfare state should be concerned about widespread fraud of the system so that people too lazy to get real jobs abuse the system in this way. Every penny that ends up leasing a Ferrari is a lot of food and shelter that should be going to the needy, not the greedy.
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