Federal authorities arrested 12 foreign-born defendants accused of funneling more than $10 million in taxpayer-funded childcare payments into bogus home daycare operations in Southern California. More than 250 federal, state, and local law enforcement officers participated in the coordinated takedown and executed 12 search warrants at homes purportedly being used as daycare facilities. Officials said all 12 defendants were taken into custody.
The Justice Department announced the federal charges on Tuesday, September 15th, following the arrests on Thursday, September 10th. The defendants are naturalized U.S. citizens and lawful permanent residents originally from Syria, Somalia, Sudan, Afghanistan, and Iraq. All live in either San Diego or El Cajon, California.
The money came from programs intended to help low-income families pay for childcare. Child Development Associates and the YMCA administer the subsidies in San Diego County and pay participating providers after receiving monthly attendance records signed by the provider and parent. Prosecutors allege the defendants collected money by submitting records for care that was never provided.
Although the 12 federal complaints are unrelated, authorities described a nearly identical method in each case. The defendants obtained licenses to operate home childcare facilities, enrolled as subsidy providers, and allegedly submitted false attendance sheets claiming children were present when they were not. The Justice Department said surveillance footage repeatedly conflicted with the attendance records used to obtain federal funds.
One complaint offers a particularly stark example. Abdulrahman Ayman Alawad allegedly claimed to have cared for 23 children in March 2026 and 25 children in April while reporting that he provided care every day during both months. As KCRA reported, surveillance covering 57 days showed children entering or leaving the home on only one day—the same day a state inspector arrived for an unannounced inspection.
Investigators also accused several defendants of billing the programs while outside the United States. Border records allegedly showed Turkiya Mamdouh Alawad left the country around January 1st, 2024, and didn’t return until approximately January 30th. Despite her absence, she allegedly submitted January attendance records and received eight deposits totaling $14,970 the following month.
Watch coverage of the federal takedown here:
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Federal complaints allege that each defendant collected between $538,000 and $1.2 million over periods ranging from several months to several years. Abdulrahman Alawad alone allegedly received more than $300,000 from San Diego County, Child Development Associates, and the YMCA during 2025. Several of the defendants are accused of collecting more than $1 million apiece.
“Today is a bad day for home daycare fraud,” U.S. Attorney Adam Gordon said. “These are the first charges alleging this type of fraud since the formation of the National Fraud Enforcement Division. These fraudsters may have criminally gamed the system before. But today, the game is over.”
The Justice Department announced the creation of the National Fraud Enforcement Division on April 7th as part of the Trump administration’s broader effort to target fraud, waste, and abuse in federal benefit programs. The investigation was also conducted under the Homeland Security Task Force established by President Donald Trump’s Executive Order 14159.
Homeland Security Investigations, IRS Criminal Investigation, the Department of Health and Human Services inspector general, the San Diego County Sheriff’s Office, and El Cajon police participated. All 12 defendants face wire fraud charges, while some also face money laundering charges. The cases are being prosecuted by Assistant U.S. Attorney Eric R. Olah for the Southern District of California.
Featured image credit: screengrab from the embedded video.