Cody Holmes Lawsuit: Shangri-La Fraud Charges and Civil Suit

The Cody Holmes Shangri-La lawsuit is actually two parallel cases against the former chief financial officer of Shangri-La Industries: a federal mail fraud prosecution filed in October 2025 in the Central District of California, and a $40 million civil suit that Shangri-La itself filed against Holmes in Los Angeles Superior Court in February 2024. Both allege that Holmes fabricated bank records to help the Los Angeles-based affordable housing developer secure tens of millions of dollars in California homeless-housing grants, then diverted millions of those public dollars to bankroll a luxury lifestyle. Holmes has pleaded not guilty in the criminal case, which is now set for trial on February 8, 2027.¹

What Prosecutors Say Holmes Did

Holmes, 31 and living in Beverly Hills at the time, was arrested by FBI and IRS Criminal Investigation agents on October 16, 2025. The federal complaint charges him with one count of mail fraud, which carries a statutory maximum of 20 years in prison.²

According to an affidavit by FBI Special Agent Kevin McMullen, Holmes submitted fake bank records and balance sheets to the California Department of Housing and Community Development purporting to show that Shangri-La and its affiliates held about $160 million in cash. The bank accounts listed in those records, McMullen stated, “did not exist.”³ Prosecutors say the fabricated records were meant to convince the state that Shangri-La had the financial capacity to complete its homeless-housing projects and to release grant money.²

The grants came through Project Homekey, California’s pandemic-era program to convert motels and hotels into permanent housing for homeless residents. In October 2022 alone, the state sent Shangri-La approximately $25.9 million for a Homekey project in Thousand Oaks.²

Once the money arrived, prosecutors allege, Holmes took a substantial cut. Between November and December 2022, more than $2.2 million was moved from a Shangri-La account to one Holmes controlled. From November 2022 through May 2023, more than $2 million was paid toward American Express accounts associated with Holmes, with charges at luxury retailers.² The complaint says at least some of those AmEx payments went to accounts belonging to Holmes’s then-girlfriend, Madeline Witt.⁴

The Shangri-La Civil Suit Against Holmes

Well before federal charges arrived, Shangri-La Industries itself sued Holmes and Witt in Los Angeles Superior Court in February 2024, seeking more than $40 million. The company accused Holmes of embezzlement, bank fraud, and check kiting between 2022 and 2023.⁵

The civil complaint describes a scheme that went beyond simple transfers. Holmes allegedly moved company cash into shell entities he controlled, including Millenium Partners Inc. doing business as 310 REIT, and recorded a fraudulent deed of trust against a Shangri-La property in Salinas to make it appear the company owed money to that shell. The suit also alleges Holmes forged signatures, including that of CEO Andy Meyers, on luxury vehicle and housing leases, and used fake email accounts to take out unauthorized loans against company properties.⁶

The itemized spending in the civil complaint includes:

$46,000 monthly rent on a Beverly Hills home, plus a Hollywood Hills rental after Holmes was fired
A leased Bentley Bentayga, a Ferrari Portofino, and a 2024 Porsche Taycan
Two Birkin handbags worth nearly $128,000, plus Chanel and Louis Vuitton bags exceeding $14,000
A $127,000 Riviera diamond necklace and a $35,000 Audemars Piguet diamond watch
Twenty VIP passes to the 2023 Coachella festival valued at more than $53,000
Regular private jet travel and what the suit called “extravagant parties”
A $12,000 student loan payment⁵

In early March 2024, Shangri-La asked for a temporary restraining order to freeze nine bank accounts controlled by Holmes. A judge denied that request. Shangri-La’s attorney, Brian Sun, said the company would file further motions over the dissipation of assets.⁵

Where the Criminal Case Stands

Holmes pleaded not guilty at his post-indictment arraignment on November 21, 2025, and was released on an $80,000 bond. The case, United States v. Holmes, 2:25-cr-00929, was assigned to U.S. District Judge John W. Holcomb.¹

A jury trial was initially set for January 5, 2026, but was continued after the court found excludable time under the Speedy Trial Act. Prosecutors filed a new indictment on May 14, 2026; the additional charges have not been publicly detailed beyond the docket entry. Trial is now scheduled for February 8, 2027, with a status conference set for January 22, 2027.¹

How Shangri-La Fits Into the Picture

The Holmes case sits on top of a much larger collapse. Between 2020 and 2022, Shangri-La received at least $117 million in Project Homekey grants across seven motel-conversion projects in cities including Thousand Oaks, Redlands, San Bernardino, Salinas, and King City.⁷ By late 2023, Shangri-La had defaulted on private loans tied to all seven and halted construction on four that had not yet opened. The state housing department found the company had violated operating agreements for six of the seven properties, including failing to record legally required affordability restrictions.⁸

On January 9, 2024, California Attorney General Rob Bonta sued Shangri-La on behalf of the state, alleging breach of contract and fraud and seeking $114 million back. As of December 2023, the company owed roughly $41 million in delinquent debt on the properties.⁹ Four Shangri-La real estate partnerships filed Chapter 11 in late April 2024, but U.S. Bankruptcy Judge M. Elaine Hammond dismissed all four by June, calling them bad-faith filings and an “unfair manipulation of the bankruptcy code”; the nonprofit partner Step Up on Second had not authorized the filings.¹⁰

CEO Andy Meyers resigned from all positions of authority at Shangri-La on May 13, 2024, and a consultant named George Blanco was brought in to run restructuring.⁷ Five of the seven Homekey projects were never completed. The Redlands (98 units) and San Bernardino (76 units) conversions were finished and are occupied.¹¹

Holmes is the only person criminally charged so far. A spokesperson for the U.S. Attorney’s Office declined to say whether Meyers or anyone else at Shangri-La is under federal investigation.⁴

The Task Force Behind the Prosecution

The Holmes charge was brought under a new Homelessness Fraud and Corruption Task Force launched in 2025 by Acting U.S. Attorney Bill Essayli, who took office on April 2, 2025. It covers seven Southern California counties and pairs federal prosecutors with agents from the FBI, IRS Criminal Investigation, and HUD’s Office of Inspector General. Essayli said California had spent more than $24 billion over five years to address homelessness but that “officials have been unable to account for all the expenditures and outcomes.”¹²

As of early 2026, Essayli said the Holmes case and a separate prosecution announced the same day were “just beginning to scratch the surface,” with “dozens of other investigations ongoing” and more charges expected.¹³

1
CourtListener. United States v. Holmes
2
U.S. Department of Justice. Beverly Hills Man Arrested, Brentwood Man Charged in Separate Criminal Cases Linked to Fraud
3
CFO.com. LA Affordable Housing Developer’s Ex-CFO Charged With Mail Fraud
4
Ventura County Star. Ex-Shangri-La CFO Accused of Misusing Funds to Convert Thousand Oaks Motel to Homeless Housing
5
The Real Deal. Shangri-La Accuses Former CFO of Embezzling $40M
6
Los Angeles Daily News. Embattled LA Developer Accuses Its Financial Chief of Looting $40 Million Intended for Homeless Housing
7
Ventura County Star. Bankruptcy Thrown Out for Developer of Thousand Oaks Homeless Project
8
CalMatters. California Homeless Developer Investigation
9
The Real Deal. California State Sues Shangri-La Industries After Project Homekey Defaults
10
Redlands Daily Facts. Judge Denies Embattled LA Developer’s Bankruptcy Request Over Ill-Fated Homeless Housing Projects
11
New York Post. Shangri-La Homeless Scam Looms Over Newsom Donations
12
Canoga Park Neighborhood Council. U.S. Attorney Launches Task Force to Investigate Homelessness Fund Fraud
13
New York Post. Fed Prosecutor Warns More Arrests Coming After Massive Fraud Found in California Homeless Services