12 charged in $10 million San Diego daycare fraud scheme, DOJ says

Twelve people are facing federal fraud charges after prosecutors alleged that more than $10 million intended to help low-income families pay for childcare was instead obtained by sham daycare providers in San Diego.

According to the Justice Department, more than 250 federal, state and local law enforcement officers arrested all 12 defendants and executed a dozen search warrants early Thursday morning at San Diego-area homes purportedly used as daycare facilities. Officials said the defendants are naturalized U.S. citizens and lawful permanent residents originally from Syria, Somalia, Sudan, Afghanistan and Iraq.

Assistant Attorney General Colin M. McDonald, head of the department’s National Fraud Enforcement Division, said the charges show that “anyone who steals from programs meant to support children will face swift and uncompromising accountability.” U.S. Attorney Adam Gordon for the Southern District of California called it “a bad day for home daycare fraud” and said these were the first charges alleging this type of fraud since the formation of the National Fraud Enforcement Division.

Officials with Homeland Security Investigations, IRS Criminal Investigation and the Department of Health and Human Services Office of Inspector General also weighed in, saying the alleged schemes exploited programs designed to help vulnerable families.

Prosecutors said the Department of Health and Human Services provides funding to California for subsidy programs administered locally by the County of San Diego, Child Development Associates and the YMCA. Those programs pay eligible providers after they submit monthly attendance records signed by the provider and parent under penalty of perjury. According to the complaints, each defendant obtained a state license and registered with the administering organizations, then allegedly submitted false attendance records claiming to have provided childcare on dates and at times when that care was not provided.

Investigators said surveillance footage conflicted with attendance claims in several cases. For instance, according to court documents, Abdulrahman Ayman Alawad claimed he cared for 23 children in March 2026 and 25 children in April 2026 and provided care every day during those months. Recordings covering 57 days allegedly showed children entering or leaving his facility on only one day—the day of an unannounced state inspection.

Prosecutors also said Alawad and several other defendants submitted attendance records claiming they provided childcare while border-crossing records showed they were outside the United States. According to the complaint against Turkiya Mamdouh Alawad, she submitted attendance records for January 2024 despite being abroad for nearly the entire month and later received eight direct deposits totaling $14,970.

According to the Justice Department, the defendants allegedly received between $538,000 and $1.2 million each over periods ranging from months to years. Several defendants allegedly received more than $1 million over the course of their respective schemes.

The defendants face federal wire fraud charges, and some also face money-laundering charges. Officials said the investigation was conducted as part of the Homeland Security Task Force initiative established under Executive Order 14159, “Protecting the American People Against Invasion.”

The charges are allegations only, and all defendants are presumed innocent unless proven guilty beyond a reasonable doubt in a court of law.