Twelve individuals in Southern California stand accused of orchestrating a sprawling $10 million fraud scheme that allegedly exploited taxpayer-funded childcare subsidies intended for low-income families by fabricating ghost daycare operations.
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According to The Post Millennial, federal agents arrested all 12 defendants in a large-scale sweep across the San Diego area that involved more than 250 federal, state, and local law enforcement officers. Investigators simultaneously executed 12 search warrants at residences that had been licensed and presented to the government as home-based daycare facilities, but which prosecutors now claim were largely fictitious operations designed to siphon public funds.
The Department of Justice stated that the defendants are naturalized US citizens or lawful permanent residents originally from Syria, Somalia, Sudan, Afghanistan, and Iraq. Authorities allege that, rather than providing legitimate childcare, the group systematically submitted falsified attendance records for children who were not actually in care, thereby diverting money from programs meant to assist struggling families.
Under federal law, Washington provides funding to California to subsidize childcare for low-income parents who rely on these services to work and support their families. In San Diego County, those funds are administered through Child Development Associates (CDA), the YMCA, and county agencies, which pay approved childcare providers directly after reviewing monthly attendance forms.
Those attendance records are supposed to reflect when children were physically present and receiving care, and must be signed by both the provider and the parent under penalty of perjury. Prosecutors say the 12 criminal complaints, though filed separately, outline nearly identical conduct in which defendants first obtained state licenses for home childcare facilities and then registered to receive subsidized payments before allegedly flooding the system with fraudulent documentation.
Surveillance cited in the complaints allegedly revealed glaring inconsistencies between the reported attendance and what was actually happening at the listed daycare locations. In one case, prosecutors say, the paperwork suggested a bustling childcare operation, while video monitoring showed almost no activity at all.
According to prosecutors, Abdulrahman Ayman Alawad claimed to have provided childcare to 23 children in March 2026 and 25 children in April, reporting that he provided care every day during both months. Yet surveillance over a 57-day period allegedly showed children entering or leaving the facility on only a single day, casting serious doubt on the legitimacy of the claimed services.
That lone day of apparent activity, prosecutors said, coincided with an unannounced visit by a state inspector, raising suspicions that the operation was staged. According to the complaint, children and Alawad himself arrived only after the inspector had already shown up, suggesting the facility may have been hastily populated to pass regulatory scrutiny.
Investigators further allege that some defendants billed for childcare services during periods when they were not even in the United States. One complaint states that border records showed Turkiya Mamdouh Alawad left the US around Jan. 1, 2024, and did not return until approximately Jan. 30, yet she allegedly submitted January attendance records and received eight direct deposits from CDA and the YMCA totaling $14,970.
The alleged fraud produced substantial personal windfalls for those involved, according to federal authorities. Prosecutors said individual defendants received between approximately $538,000 and $1.2 million over periods ranging from several months to multiple years, with some allegedly collecting more than $1 million each.
Records cited in the complaints indicate that Abdulrahman Alawad received more than $300,000 from San Diego County, CDA, and the YMCA in 2025 alone. For taxpayers and genuinely needy families, those figures underscore how much money may have been diverted from legitimate childcare providers who follow the rules and serve real children.
This was not a victimless crime, IRS Criminal Investigation Chief Jarod Koopman said. It deprived working parents of critical support and eroded trust in programs meant to protect the most vulnerable in our communities.
The defendants are identified as Fosiya Mohamoud of Somalia; Abdulrahman Alawad, Khetam Haouash, Mohamad Alawad, Mazin Alawad, and Turkiya Alawad of Syria; Zetun Abdi of Somalia; Ikramullah Mohmmand, Khatera Hashimi, and Zaryab Daudzai of Afghanistan; Mariam Khamis of Sudan; and Cezar Yaqoob of Iraq, all residing in San Diego or El Cajon and ranging in age from 22 to 63. Each of the 12 faces federal wire fraud charges, with some also charged with money laundering, reflecting what prosecutors portray as a calculated effort to exploit a generous welfare program with minimal oversight.
These are the first charges alleging this type of fraud since the formation of the National Fraud Enforcement Division, US Attorney Adam Gordon said. These fraudsters may have criminally gamed the system before. But today, the game is over.
For conservatives long concerned about systemic abuse in expansive welfare and subsidy programs, the case highlights the need for stricter verification, tougher enforcement, and a renewed focus on ensuring that taxpayer dollars support working families rather than fraudulent operators who treat public benefits as a personal revenue stream.
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