A Republican challenger for New York attorney general is pressing Letitia James to explain why her office has done so little to police the nonprofit shelter system, even as taxpayer spending per homeless person has soared past $81,000 and city investigators have flagged rampant self-dealing inside the providers.
Saritha Komatireddy, the Republican candidate for attorney general, told Fox News Digital that James has failed to use her office's Charities Bureau, the arm of the AG's office responsible for overseeing every nonprofit in the state, to audit and investigate shelter operators collecting billions in public funds. The accusation lands at a moment when multiple government reports have documented waste, fraud, and abuse across dozens of city-funded providers.
A March 2026 report from the New York State Comptroller found that the city spent roughly $81,700 per unsheltered homeless person in fiscal year 2025. Spending on street homelessness has more than tripled since 2019, while the city's homeless population climbed 78 percent over the same period. The numbers paint a picture of a system consuming vastly more money while delivering diminishing returns for the people it is supposed to help.
Komatireddy calls James' record a failure on shelter oversight
Komatireddy framed her criticism around a simple question: where did the money go?
"So, there really are questions about what has happened to that money and why that's happening. The person who should be asking those questions, the person who should be investigating, is the attorney general."
She did not stop there. Komatireddy said James has the legal tools and the institutional mandate to act, and has chosen not to.
"It's the attorney general's job to audit and investigate the homeless shelter nonprofits. We have a Charities Bureau in the attorney general's office whose responsibility is to oversee and supervise all nonprofits in the state, but Letitia James has not been doing that job."
The Charities Bureau exists precisely for this purpose. Under New York law, the attorney general has authority to challenge improper transactions involving nonprofit organizations, a point the New York City Department of Investigation itself made in a 2024 review of shelter providers. That review examined 51 city-funded shelter operators and found nepotism, a lack of competitive bidding, and executive salaries approaching or exceeding $1 million.
Komatireddy pointed to those compensation figures directly. "The amount of money that's being spent is really shocking," she said. "We know that at least one homeless shelter CEO received a million dollars in compensation. Meanwhile, New Yorkers are sleeping on the streets."
A trail of scandals James did not initiate
The pattern Komatireddy describes is not hypothetical. A series of investigations, most of them launched by agencies other than the attorney general's office, have uncovered serious misconduct at prominent shelter nonprofits over the past five years.
In 2021, the New York Times published an investigation in which at least 10 women accused Victor Rivera, CEO of the Bronx Parent Housing Network, of sexual assault or unwanted sexual conduct while they lived in shelters his nonprofit operated. Weeks later, federal prosecutors indicted Rivera on conspiracy, wire fraud, and money laundering charges tied to an alleged kickback scheme. He pleaded not guilty. The federal case, not the attorney general's office, drove that accountability.
New York City has seen a broader pattern of federal law enforcement stepping in where local and state oversight has fallen short, a dynamic that raises uncomfortable questions about the capacity, or willingness, of state-level officials to police their own jurisdictions.
James' office did take two public enforcement actions against shelter nonprofits. In 2022, the Charities Bureau settled with HELP USA after investigating conflict-of-interest issues involving former CEO Alan Altheide. The settlement required governance reforms. In 2023, the AG filed a lawsuit seeking to dissolve Housing Bridge Inc., alleging its executives diverted charitable assets for personal benefit.
But those two cases represent what Fox News Digital described as "only a handful of enforcement actions" over James' entire tenure, against a backdrop of 51 providers flagged by the city's own investigators and multiple nonprofits cited in state comptroller audits for millions of dollars in unsupported or improper costs. The comptroller's audits identified problems at CAMBA, Westhab, the Institute for Community Living, and Samaritan Daytop Village, among others.
The gap between the scale of documented problems and the attorney general's response is the core of Komatireddy's argument. She called for a comprehensive response.
"We need to audit and investigate every homeless shelter nonprofit in New York. Make sure the people who are doing a good job are supported, the people doing a bad job are cut off from taxpayer money and the people committing crimes are prosecuted and put in jail."
James' campaign pushes back, but the numbers remain
A spokesperson for James' campaign dismissed the criticism. "Saritha Komatireddy's latest line of attack is as hollow as her record of public service," the spokesperson said. "While Saritha is busy playing politics, New York Attorney General Letitia James has spent over two decades working hand-in-hand with government partners across New York City and state to protect homeless New Yorkers and hold bad actors accountable."
The statement did not address specific findings from the comptroller's report or the DOI review. It did not name additional enforcement actions beyond those already public. And it did not explain why the Charities Bureau, with explicit statutory authority over nonprofit misconduct, produced so few cases while other agencies were uncovering fraud, self-dealing, kickbacks, and conflicts of interest across the shelter system.
This is not the first time Komatireddy has targeted James' oversight record. Earlier in 2026, she criticized James' management of the Medicaid Fraud Control Unit after federal officials suspended its funding, a separate but thematically related failure of the AG's office to maintain basic institutional competence.
James, meanwhile, faces her own legal troubles. A federal grand jury declined to indict her on revised mortgage fraud charges related to a 2020 home purchase in Norfolk, Virginia, where she allegedly listed a property as her primary residence to obtain favorable loan terms while her grandniece actually lived there. James said she was "grateful to the members of the grand jury" and vowed to continue doing her job. But federal prosecutors still have a six-month window to refile, and the DOJ has characterized the matter as a "garden-variety mortgage fraud prosecution" supported by documentary evidence, including a 2024 text message from James stating, "I do not want to take deduction. It looks suspicious and I need to do everything according to the tax code."
The mortgage case and the shelter oversight questions are legally separate. But they feed the same narrative: an attorney general whose office has been more aggressive in pursuing high-profile political cases than in policing the fraud and waste happening under her own jurisdiction's nose.
Federal authorities have shown an increasing willingness to fill the vacuum left by state and local officials across New York. From federal bribery probes sweeping city government to corruption investigations reaching into state legislatures, the pattern is consistent: Washington steps in when Albany and City Hall do not.
$81,700 per person, and the shelters are still failing
The comptroller's numbers deserve a second look, because they capture the full absurdity of the situation. New York City spent $81,700 per unsheltered homeless person in a single fiscal year. That figure has more than tripled since 2019. And the homeless population grew 78 percent over the same period.
Spending surged. The problem got worse. The nonprofits collecting the money paid their executives seven-figure salaries. And the state's chief law enforcement officer for nonprofit oversight, the attorney general, brought a handful of cases.
James' office has also drawn scrutiny for its prosecutorial choices in other contexts. Her office dropped a case against an NYPD lieutenant who shot an armed man pointing a gun at him, a decision that raised questions about how the AG's office allocates its limited enforcement resources and what priorities drive those choices.
The DOI's 2024 review laid out the roadmap. It identified the problems, nepotism, no-bid contracts, bloated pay, and pointedly noted that the attorney general already has the legal authority to act. Two years later, Komatireddy is asking why James hasn't used it.
High-profile federal cases against public officials have become a recurring feature of New York's political landscape. Similar federal corruption probes have reached into other states as well, suggesting a broader pattern of federal prosecutors stepping into gaps left by state-level enforcement.
The James campaign's response, that the AG has "spent over two decades working hand-in-hand with government partners", reads less like a rebuttal and more like an admission that the office has been content to play a supporting role while federal prosecutors, city investigators, and the state comptroller did the heavy lifting.
Taxpayers spent $81,700 per homeless person. The homeless population grew by 78 percent. Shelter executives collected million-dollar salaries. And the office with the legal mandate to police all of it managed a handful of cases. If that is accountability, New Yorkers cannot afford much more of it.
