Former Shangri-La Industries CFO accused of using Project Homekey money to pay for private jets, exotic cars and large parties, lawsuit says

LOS ANGELES, Calif. (KION-TV) — The former Chief Financial Officer of Shangri-La Industries (SLI) is being sued in civil court for using Project Homekey money provided by the state to “maintain an extravagant lifestyle.”

SLI is currently being sued by King City for mishandling funding provided by the state for a homekey project at 1130 Broadway Street. It’s one of multiple projects designed to help the homeless.

The lawsuit claims former company CFO, Cody Holmes is at fault, along with an ex-girlfriend identified as Madeline Witt. It’s a civil case being heard in the Superior Court of California, Los Angeles County.

In court documents provided by attorney Brian Sun at Norton Rose Fulbright, Holmes is believed to have embezzled at least $7,251,681 – transferring money from bank accounts designated from homekey projects to his own personal accounts along with Witt’s and entities he owned.

Holmes and Witt are also accused of using at least $494,980 to buy expensive watches, Louis Vuitton bags, a private jet, VIP passes to Coachella Music and Arts Festival and monthly payments on a Ferrari.

According to the lawsuit, funds were transferred from SLI and other agency accounts from July 12, 2022 to around September 5, 2023.

Holmes is also accused of trying to cover up his alleged actions by creating “fraudulent lending documents.”

It’s all of these incidents that Sun believes has left Project Homekey housing projects up and down California in limbo.

This includes multiple projects in Salinas and one in King City.

The King City project was previously announced to be in foreclosure proceedings after the city said SLI defaulted on loans they acquired without any required approvals.

The court document suggests the actions of Holmes and Witt have led SLI and other entities involved with creating Project Homekey housing to lose the trust of other agencies and cities that relied on them to get the projects done.

This includes King City and the State Department of Housing and Community Development, who have filed a lawsuit against Shangri-La.

KION previously reported the state’s lawsuit is also being filed against King City and the City of Salinas.

The City of Salinas has not indicated at this time whether they intend to sue Shangri-La like King City did.

As for the lawsuit against Holmes and Witt – court documents show Sun and SLI are seeking at least $20 million in damages, and potentially more in damages for lost business income.

SLI was tasked with building and maintaining affordable housing structures in Riverside, Ventura, San Bernardino, San Diego and Monterey counties.

Below are the projects the lawsuit claims have been directly impacted by the actions of Holmes and Witt:

  • 180 Sanborn Street – Salinas, Calif. (59 unit project): Construction not yet started
  • 190 Calle Primera – San Ysidro, Calif. (58 units): Construction not yet started
  • 450 G Street, San Bernardino, Calif. (77 units): Complete and occupied
  • 545 Work Street, Salinas, Calif. (103 units): Construction started but halted
  • 1030 Fairview, Salinas, Calif. (44 units): Construction started and close to completion
  • 1130 Broadway, King City, Calif. (47 units): Construction not yet started
  • 1675 Industrial Park, Redlands, Calif. (101 units): Complete and occupied
  • 1228 Normandie, Los Angeles, Calif. (76 units): Construction not yet started
  • 12 Conejo Blvd., Thousand Oaks, Calif. (77 units): Construction ongoing

Lawsuit is attached below with some elements highlighted as reported above:

We’re reaching out to Holmes for comment about this lawsuit


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