San Francisco nonprofit running homeless shelter accused of $100K fraud, nepotism
SAN FRANCISCO – A San Francisco-based nonprofit that provides services to the homeless has been suspended amid allegations of fraud and nepotism, officials announced Monday.
City Attorney David Chiu said he initiated debarment proceedings against the Providence Foundation of San Francisco. Chiu also suspended the organization from receiving new city contracts or grants, effective immediately.
"This nonprofit took over $100,000 of public money meant to benefit people experiencing homelessness. That cannot be tolerated," Chiu said in a statement. "My office's work to root out bad actors who take advantage of our public resources continues. We will find out about your misdeeds, cut off your funding, and hold you accountable."
Providence has received at least $105,000 from the city based on what the city attorney describes as "blatantly fraudulent" invoices. The invoices stem from renovation work at the Oasis Hotel on Franklin Street, which the group operates as a shelter for families experiencing homelessness.
Officials said work was supposed to include repainting the exterior and removing deadbolt locks at the hotel, but the work was not performed.
The fraudulent notices for the work are from Robert Lacy, Jr. and his company Will Do It Construction. The city attorney said the invoices had a fabricated contractor's license number and were sent to the group's director of operations and executive director.
"The lack of new exterior paint is obvious to any person who views the Oasis, let alone the Executive Director and Director of Operations of the nonprofit in charge of operating the hotel," Chiu's office said in a statement.
The city attorney also claimed that Lacy began working as a client engagement manager for Providence in late 2023 and was promoted to assistant site manager of the Central Waterfront Navigation Center several months later.
Providence is also accused of violating an anti-nepotism provision in its grant agreement with the city involving several hires. Chiu's office said the company hired two of the executive director's children and hired a child of the group's vice president of the Board of Directors.
Other alleged violations include wage theft from employees, recording guests and staff during confidential conversations, failing to reach the 90% occupancy rate at the Oasis and failing to respond to city requests for fiscal monitoring.
"These actions have not only breached Providence's grant agreement with the City and misled the City into paying for work that was never completed, but they deprived vulnerable San Franciscans of critical services that the City earmarked for their benefit," Chiu's office said in its court filing.
Chiu's seeks to ban the group from receiving city contracts and grants for up to five years.
