Federal prosecutors charged 12 naturalized U.S. citizens and lawful permanent residents with allegedly collecting more than $10 million in subsidized childcare payments for services they did not provide, including one daycare where surveillance showed children on only one of 57 monitored days.
By yourNEWS Media Newsroom.
Twelve San Diego-area home daycare operators have been charged in separate federal fraud cases alleging they collected more than $10 million intended to provide childcare for low-income working families while submitting false records for children prosecutors say frequently were not there.
The defendants are naturalized U.S. citizens and lawful permanent residents originally from Syria, Somalia, Sudan, Afghanistan and Iraq, according to the Department of Justice, which announced the cases Tuesday.
More than 250 federal, state and local law-enforcement officers participated in a coordinated operation that arrested all 12 defendants and executed search warrants at a dozen San Diego-area homes purportedly operating as childcare facilities.
Federal prosecutors describe the facilities as 12 separate “ghost daycare operations” that allegedly relied on variations of the same basic scheme.
The U.S. Department of Health and Human Services supplies federal funding to California to help eligible low-income families pay for childcare. In San Diego County, Child Development Associates, or CDA, and the YMCA are among the organizations that administer those subsidy programs.
Once a family qualifies, government-funded payments are made directly to an approved childcare provider. Providers must submit monthly attendance records listing the dates and times each child was actually in care, with the records signed by both the provider and parent under penalty of perjury.
Federal complaints allege the defendants obtained California licenses to operate home childcare businesses, enrolled as subsidized childcare providers and then knowingly reported caring for children on days and during hours when that care was never provided.
CDA and the YMCA allegedly relied on those records when issuing direct deposits funded through government childcare programs.
“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.”
IRS Criminal Investigation Chief Jarod Koopman said financial investigators identified what federal authorities characterize as daycare operations collecting substantial sums without providing the childcare claimed on official records.
“Today’s takedown exposes a sprawling fraud scheme that siphoned more than $10 million from programs designed to help low-income families who depend on subsidized childcare,” Koopman said. “By following the money, IRS Criminal Investigation uncovered patterns of deceit that revealed twelve ghost daycare operations billing for children who were never present.”
“This was not a victimless crime,” he added. “It deprived working parents of critical support and eroded trust in programs meant to protect the most vulnerable in our communities.”
One of the most striking allegations concerns Abdulrahman Ayman Alawad, 25, of El Cajon.
According to his federal complaint, Alawad submitted attendance records claiming that he provided childcare to 23 children in March and 25 children in April 2026. The records allegedly represented that children received care every day throughout those two months.
Investigators placed the facility under surveillance.
Recordings covering 57 days allegedly showed children entering or leaving the residence on just one day.
That day was also the day a California inspector arrived unexpectedly.
Federal prosecutors said surveillance showed children — as well as Alawad himself — arriving at the daycare after the inspector had already appeared for the unannounced inspection.
Alawad allegedly received more than $300,000 from San Diego County, CDA and the YMCA during 2025 alone.
The complaints describe several other cases in which providers reported delivering childcare while federal border-crossing records allegedly showed they were outside the United States.
Prosecutors highlighted Turkiya Mamdouh Alawad, 63, of San Diego.
According to her complaint, border records show she left the United States around Jan. 1, 2024, and did not return until approximately Jan. 30.
Nevertheless, prosecutors say she submitted records claiming childcare services for January. The following month, CDA and the YMCA allegedly made eight direct deposits totaling $14,970 based on those submissions.
The government alleges each of the 12 defendants received between approximately $538,000 and $1.2 million during alleged schemes lasting anywhere from months to years.
Several individually received more than $1 million, prosecutors said.
The defendants identified by federal prosecutors are Fosiya Mohamoud, 50, originally from Somalia; Abdulrahman Alawad, 25, originally from Syria; Zetun Abdi, 43, originally from Somalia; Ikramullah Mohmmand, 25, originally from Afghanistan; Khetam Haouash, 37, originally from Syria; and Khatera Hashimi, 39, originally from Afghanistan.
Also charged are Mariam Khamis, 42, originally from Sudan; Mohamad Alawad, 29, originally from Syria; Mazin Alawad, 22, originally from Syria; Turkiya Alawad, 63, originally from Syria; Zaryab Daudzai, 25, originally from Afghanistan; and Cezar Yaqoob, 36, originally from Iraq.
Seven reside in El Cajon and five in San Diego, according to DOJ.
All 12 are charged with wire fraud. Some defendants also face money-laundering charges.
The Justice Department lists a maximum penalty of 20 years in prison and a $500,000 fine for the charged wire-fraud offense. The money-laundering offense carries the same maximum prison term and fine in the charging announcement.
The charges are allegations. None of the defendants has been convicted in these cases, and each is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The investigation involved Homeland Security Investigations, IRS Criminal Investigation, the Department of Health and Human Services Office of Inspector General, the San Diego County Sheriff’s Office and the El Cajon Police Department, along with other members of the federal Homeland Security Task Force.
The prosecutions also mark the first home-daycare fraud charges announced by DOJ since the creation of its National Fraud Enforcement Division in April.
The latest cases are not San Diego’s first major federal prosecution involving subsidized childcare.
In 2023, prosecutors charged Mohamed Muriidi Mohamed and three relatives in a separate $3.7 million scheme centered on the UMI Learning Center.
That operation used a different method.
According to federal prosecutors, UMI falsely certified that parents were working or attending classes at the vocational and language school, making them appear eligible for subsidized childcare during those hours.
Childcare providers then submitted attendance forms claiming they were caring for those parents’ children while the parents supposedly worked or attended school.
Prosecutors alleged that the childcare had not actually been provided during the claimed periods and that participating providers were expected to split subsidy proceeds with parents.
Mohamed later pleaded guilty and was sentenced in August 2024 to 27 months in federal prison.
A federal judge also ordered him to pay $3.7 million in restitution to Child Development Associates.
His three co-defendants also pleaded guilty, according to DOJ.
The new prosecutions arrive months after independent journalist Nick Shirley publicized allegations of fraud involving California childcare and hospice providers.
Shirley traveled to San Diego daycare facilities in February and accused some operators of running “ghost facilities” where he said he found little or no evidence of children being cared for.
He later said his broader California investigation had identified more than $170 million in what he characterized as suspected fraud involving childcare centers, hospices and other government-funded providers. That $170 million figure represents Shirley’s own assessment of suspicious payments and facilities, not a federal finding that $170 million was fraudulently obtained.
The Justice Department has not said that Tuesday’s criminal complaints resulted from Shirley’s reporting, and the federal allegations should not be treated as validating every claim he made about other facilities.
The controversy surrounding his work nevertheless spilled into California politics this year.
Republican lawmakers dubbed Assembly Bill 2624 the “Stop Nick Shirley Act,” arguing that the legislation could discourage independent investigations of organizations receiving taxpayer funds.
The law signed by Gov. Gavin Newsom does not categorically prohibit journalists from investigating or photographing immigrant-service organizations.
Instead, it expands California’s existing Safe at Home confidentiality program to certain immigration-support service providers, employees and volunteers who can demonstrate credible threats of violence.
It also restricts knowingly publishing protected personal information or images with the intent to cause imminent great bodily harm or place covered individuals in reasonable fear of such harm. Supporters describe the law as a safety measure for threatened workers, while opponents argue parts of it are overly broad and could raise First Amendment concerns. It is scheduled to take effect Oct. 1, 2027.
That legislative dispute is separate from the federal criminal cases announced Tuesday.
The defendants now charged in San Diego are accused not because of their countries of origin or immigration histories, but because prosecutors allege specific attendance records, surveillance evidence, border-crossing information and payment records demonstrate fraudulent billing.
The Justice Department says all 12 are either naturalized U.S. citizens or lawful permanent residents.
Federal investigators contend that the alleged conduct diverted money from programs intended to help working families who could not otherwise afford childcare.
“These charges underscore a simple truth: anyone who steals from programs meant to support children will face swift and uncompromising accountability,” Assistant Attorney General Colin M. McDonald said. “Fraud against these programs is an attack on vulnerable families, and law enforcement will continue to dismantle schemes that exploit them.”
For investigators, the most consequential evidence may ultimately be the gap between what providers certified on paper and what surveillance, financial and travel records allegedly showed in reality.
In one case, prosecutors say records described a daycare serving more than 20 children every day for two consecutive months.
Federal surveillance allegedly saw children there only once in 57 days.
And that one day, according to the complaint, was when the inspector arrived.
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