How $26 Million for a Thousand Oaks Homeless Project Ended Up Paying Beverly Hills Credit Cards
Daniel Jordan 
$26 Million Fraud Case Raises Questions About Oversight of California’s $24 Billion Homeless Spending
(CLAIR | Thousand Oaks, CA) — The old Quality Inn on Thousand Oaks Boulevard was supposed to be a fresh start — 77 new apartments for people with nowhere else to go. Instead, two years later, its doors remain locked, its parking lot empty, and nearly $26 million in taxpayer money is gone.
According to the U.S. Department of Justice, much of that money — meant to fund Thousand Oaks’ first homeless housing project — was stolen.
Arrest Tied to Local Project
According to a U.S. Department of Justice (DOJ) press release issued October 10, Cody Holmes, 31, of Beverly Hills, was arrested and charged with fraud for allegedly stealing $25.9 million in state grant funds intended for a Thousand Oaks Project Homekey development.
Holmes served as the chief financial officer of Shangri-La Industries LLC, a Los Angeles-based affordable housing developer. The DOJ alleges that Holmes submitted fake bank statements showing that Shangri-La had $160 million in assets, which helped the company qualify for California’s Homekey program — a state effort to convert motels into housing for unhoused residents.
According to the DOJ complaint, the California Department of Housing and Community Development (HCD) wired nearly $26 million to Shangri-La in October 2022 for the Thousand Oaks project.
Federal investigators say Holmes diverted more than $2.2 million into his own accounts and used the funds to pay American Express bills, including luxury purchases.
“Even though the developer received all the money from the state, the developer did not complete the construction of the Thousand Oaks project,” said Acting U.S. Attorney Bill Essayli, as quoted in the DOJ statement. “Essentially, he stole the money.”
The FBI and IRS Criminal Investigation Division assisted in the arrest and executed search warrants in Beverly Hills and Century City, according to the DOJ.
A Project Once Seen as a Breakthrough
According to the Ventura County Star, the City of Thousand Oaks announced the $27 million state award in August 2022 as part of California’s Project Homekey initiative. City officials described the project as a “major milestone” that would convert the Quality Inn & Suites near the 101 Freeway and Hillcrest Drive into 77 units of permanent supportive housing — the city’s first facility of its kind.
The total project cost was projected at $31.7 million, combining the state grant with local funding from the City of Thousand Oaks and the County of Ventura, according to the Star. The new housing would include onsite mental health care, job assistance, and case management — services designed to move people out of homelessness permanently. Instead, the site sits idle.
A Pattern of Problems with the Developer
According to CalMatters and state court filings, Shangri-La Industries has faced scrutiny across California for mismanagement of similar Homekey projects. In early 2024, the California Department of Housing and Community Development (HCD) filed a civil lawsuit against the company, seeking the return of $114 million in public funds for projects in Ventura County, Salinas, and King City that were left incomplete or abandoned.
The DOJ’s criminal case against Holmes is the first federal prosecution stemming from those investigations. Court records show that the $25.9 million paid for the Thousand Oaks project was among the largest single Homekey grants awarded — and one of several now under federal review.
A Second Developer Also Charged
In a separate case announced the same day, federal prosecutors charged Steven Taylor, 44, of Brentwood, with seven counts of bank fraud, one count of aggravated identity theft, and one count of money laundering. According to the DOJ, Taylor is alleged to have fraudulently purchased an $11.2 million property in Cheviot Hills and secretly resold it for $27.3 million in a “double escrow” deal — also funded through Homekey dollars.
Taylor has pleaded not guilty and was released on a $3.6 million bond, according to the DOJ.
The Local Fallout
According to local news reports, the Thousand Oaks project remains stalled. The Quality Inn property sits unused, fenced, and in limbo. No city officials have been accused of wrongdoing, but the case has raised questions about how state funds were monitored.
“This was supposed to be a model project,” a local housing advocate told the Star. “Instead, it’s become a reminder of how vulnerable these programs are to fraud.”
The Ventura County Civic Alliance’s 2023 State of the Region Report highlights why the loss hurts.
Median home prices top $700,000, nearly 9% of county residents live below the poverty line, and rents continue to rise faster than wages.
“That $26 million could have changed real lives here,” said a community outreach worker familiar with the project. “It was supposed to get people off the streets and into homes.”
The Bigger Picture
Between 2019 and 2024, California has spent more than $24 billion on homelessness, according to state budget data reviewed by CalMatters. Yet more than 180,000 Californians remain unhoused — about one-third of the nation’s homeless population.
That level of spending equals roughly $40,000 per unhoused person per year, but the State Auditor’s Office found that California “did not consistently track results or hold local agencies accountable for outcomes.”
“The goal is noble,” said Acting U.S. Attorney Bill Essayli. “But when millions meant for homeless housing end up paying luxury credit cards, that’s not just a crime — it’s a betrayal of public trust.”
What Comes Next
According to the DOJ, Holmes faces up to 20 years in federal prison if convicted.
The Homeless Fraud and Corruption Task Force, which includes the U.S. Attorney’s Office, FBI, and IRS, continues to investigate misuse of state homelessness funds.
Officials encourage anyone with information about fraud involving public housing money to contact tips.fbi.gov or call 1-800-CALL-FBI.
Meanwhile, Thousand Oaks city officials say they are working with state agencies to recover lost funds and explore whether the stalled project can still move forward.
For now, the quiet, empty motel on Thousand Oaks Boulevard stands as a $27 million reminder — not just of what went wrong, but of how much Ventura County still stands to lose when oversight fails.
