The former chief financial officer of Shangri-La Industries, the company that took $117 million in state funds to convert motels into housing for the homeless but left projects abandoned in Thousand Oaks and other cities, was arrested Oct. 16 on federal fraud charges.
Cody Holmes, a 31-year-old Beverly Hills resident, faces one charge of mail fraud, which could carry a sentence of up to 20 years if he is convicted. The criminal charge against him states that he falsified bank records to secure millions in public funds and used some of the money to pay credit card bills for his own personal expenses and those of this then-girlfriend.
The charge was filed Oct. 10 but was sealed until his arrest on Oct. 16. He was expected to appear in federal court in Los Angeles during the afternoon of Oct. 16 but will not enter a plea yet, according to a statement from the U.S. Attorney’s Office in Los Angeles.
The former Quality Inn & Suites in Thousand Oaks sits amid construction rubble in March 2024. Work stopped on the project intended to be transformed by Shangri-La Industries into permanent supportive housing for the homeless. The company’s CFO was arrested Oct. 16.
Holmes could not be reached for comment on the day of his arrest. Neither could his attorney, a federal public defender. A spokesperson with the U.S. Attorney’s Office would not comment on whether there are federal criminal investigations into anyone else at Shangri-La, including its CEO, Andy Meyers.
Shangri-La was the developer behind the planned conversion of the former Quality Inn & Suites in Thousand Oaks into 77 studio apartments for the homeless, as well as similar projects up and down the state, funded by state grants under a program known as Project Homekey.
The company was awarded $26 million in state funds for the Thousand Oaks project, one of seven Project Homekey grants given to Shangri-La, totaling $117 million. Five of the seven projects were never completed, including the one in Thousand Oaks.
The Thousand Oaks property was foreclosed upon by a lender after Shangri-La stopped paying its mortgage. The renovation was left half-done, with contractors unpaid, and the site has been virtually abandoned for the past two years.
A local affordable housing nonprofit has expressed interest in reviving the plan to renovate it, but without a state grant like the one Shangri-La had, it’s not clear if there’s a way to make that happen.
“We are pleased to see those accused of crimes that affected our ability to deliver housing to some of our most vulnerable being brought to justice,” said Thousand Oaks City Manager Drew Powers by text.
The criminal complaint against Holmes says that Shangri-La applied for a total of $437 million in state funding, in partnership with a nonprofit called Step Up, which was going to operate the housing that Shangri-La built. To qualify for the grants, Shangri-La had to show that it had enough of its own cash on hand to do the work it was proposing.
It did not have that cash, the complaint states. To make it look like it did, Holmes submitted bank statements that were “fake and grossly inflated,” claiming that the company had $159 million in its accounts, according to an affidavit filed by the FBI agent who investigated Holmes.
“In fact, the bank accounts did not exist,” the agent stated in the affidavit.
Holmes joined Shangri-La Industries as an intern in 2014 and was the company’s CFO from 2019 to 2024. The company fired him in January 2024, and the next month it sued him, accusing him of diverting more than $8 million in company funds for his own personal expenses.
Shangri-La’s lawsuit claimed Holmes and his then-girlfriend, Madeline Witt, spent company money on rented Beverly Hills real estate, a leased Ferrari, private jet travel, VIP passes to Coachella and more than a quarter of a million dollars in jewelry and handbags. One of the bags was a $110,000 auction purchase of a Himalaya Birkin from Hermès, one of the world’s most expensive handbags.
The criminal charge against Holmes states that in late 2022 and early 2023, Holmes paid more than $2 million toward Witt’s American Express accounts, “including purchases at well-known luxury retailers.” According to the FBI agent’s affidavit, the money came from the state grant that was supposed to fund the conversion of the Quality Inn in Thousand Oaks into housing for 77 homeless people.
Tony Biasotti is an investigative and watchdog reporter for the Ventura County Star. Reach him at tbiasotti@vcstar.com. This story was made possible by a grant from the Ventura County Community Foundation’s Fund to Support Local Journalism.
This article originally appeared on Ventura County Star: Ex-CFO arrested, accused of misusing funds for TO motel conversion