By Nick Valencia | January 3, 2026
LOS ANGELES— There’s a house near MacArthur Park that was supposed to save lives. A 10,000-square-foot mansion designed by the same immigrant architect who gave Los Angeles its City Hall and Union Station. It once belonged to the Machados, one of the city’s earliest Mexican families, and it was later transformed into a group home for undocumented children.
But the vision didn’t hold. The house sits mostly hollow now, its promise cracked like the paint peeling off its historic face. According to a whistleblower we interviewed, for more than a decade while the city of Los Angeles continued to look the other way, no children were helped and no one was held accountable.
A House Meant to Heal: A Pattern of Neglect
In 1998, the City of Los Angeles entered into a 40-year agreement with a nonprofit developer to turn the mansion at 845 South Lake Street into transitional housing for homeless youth. The contract mandated that the home provide 16 to 18 beds for youth in crisis which included undocumented and unaccompanied minors. A few years later, it opened under the name Casa Libre, or Freedom House.
The project was founded by Peter Schey, the now deceased civil rights attorney who had helped argue the Supreme Court case affirming the right of undocumented children to attend public schools. Schey played a key role in the Flores Settlement Agreement—the landmark 1997 consent decree that governs how children in immigration custody must be treated. His reputation was powerful. His intentions, on paper, noble.
But inside the house, a different reality unfolded.
According to a 2019 Los Angeles Times investigation, Casa Libre was cited 143 times by California’s Department of Social Services—89 of those citations were considered “immediate risk” to the safety or rights of the children inside.
Children were left unsupervised, locked out of the home with nowhere to go. Some were forced to wait outside in a broken-down van. Former staff and residents described food shortages, violent altercations, bed bugs, cockroach infestations, and drug use inside the facility. And yet, the organization behind Casa Libre continued to receive support and praise from some of the same institutions that once lauded its founder.
“Is it perfect? No,” Schey said in an interview with the LA Times when he was still alive. “Could we improve? Yes, absolutely.”
The Legal Obligation That Never Ended
Whistleblower Federico Bustamante worked as the administrator of the program under the now deceased Executive Director Peter Schey.
“I started as a volunteer and ended up in that position because literally everybody left due to the staggering corruption,” he said. “The community and the immigrant children lost on a promise service.”
“This isn’t just moral failure; it’s contractual fraud,” Bustamante told me outside the home during our visit in late 2025.
He left on poor terms with leadership after trying to call out mismanagement. Since leaving, Bustamante has pored over the contract, and what it says is unambiguous: the site must operate as a shelter for homeless youth until the year 2038. The requirement is binding, not just on the original operators, but on all successors.
According to him, for the past 10 years, the nonprofit has failed to submit the annual documentation required to demonstrate compliance with the contract. That silence didn’t just violate the terms of the agreement—it concealed the fact that, even after Schey’s death, the house had ceased to function as the refuge it was meant to be.
On the Ground, It’s Even Worse
When we visited the home in late 2025, it was clearly in disrepair. The property showed signs of occupation, but not by homeless youth. There were no children. There were no staff. There was, instead, what appeared to be a dog on the porch and personal vehicles tucked behind the gates.
A search of county records confirmed what we’d suspected: the current titleholder of 845 South Lake Street is the Center for Human Rights and Constitutional Law Inc. (not to be confused with the similarly named legal foundation of the same name, though they appear to co-exist under the same organizational umbrella). According to the Los Angeles County Registrar’s Office, the title has not changed hands.
We reached out to the nonprofit repeatedly—through emails, phone calls, and formal requests. We gave them weeks to respond to the allegations. To date, we’ve received no reply.
The City Responds, Quietly: A Legacy in Ruin
After weeks of being passed around various city departments, we were eventually directed to the right division within the Los Angeles Housing Department. And for the first time, we received confirmation that movement may finally be underway.
“Staff has reached out to the contact at that location to discuss next steps and finding a new owner for the property,” a spokesperson told us.
City officials also acknowledged that the contact information on file had changed, and that the Los Angeles Housing Department has a meeting scheduled for early January to determine how to move forward.
There’s a bitter irony in all of this: the man who helped secure protections for migrant children under Flores also helped create the shelter now under scrutiny. A man whose name once opened doors is now the reason so many have chosen to look away.
But buildings don’t lie. And contracts don’t expire just because the will to enforce them does.
