Twelve people in the San Diego area face federal fraud charges over more than $10 million in public money meant to help low-income families pay for child care, the Justice Department said September 15. Prosecutors allege the defendants ran licensed home daycares that billed subsidy programs for children who were not actually in their care. More than 250 federal, state and local officers arrested all 12 defendants and searched 12 homes in a coordinated operation. The charges are allegations, and the defendants are presumed innocent unless proven guilty.
How prosecutors say the scheme worked
According to the Justice Department announcement, the U.S. Department of Health and Human Services provides federal money to California to help low-income families pay for child care. In San Diego County, the county government, Child Development Associates and the YMCA run the subsidy programs. Once a family qualifies, those organizations pay the child-care provider directly after the provider submits monthly attendance records showing the dates and times each child was in care. Both the provider and a parent must sign the records under penalty of perjury. California law also requires a licensed provider to be present and to supervise children at all times, except for limited temporary absences when a qualified substitute is on site.
Prosecutors say the 12 federal complaints are separate and unrelated, but the method was essentially the same. Each defendant obtained a California license to run a home child-care facility and registered with Child Development Associates and the YMCA to serve subsidized families. The defendants then allegedly submitted attendance records claiming care on dates and at times when none was provided, and certified under penalty of perjury that the records were accurate. The programs relied on those records and paid with federal funds.
For families who get a call about this case. A widely covered fraud takedown can be followed by callers claiming to represent investigators or a recovery fund and asking for personal details. The fraud evidence and report log and the family code word in The Senior Fraud Defense & First-Hour Recovery Kit help a household check a caller before sharing anything.
Surveillance video and border records
DOJ says the complaints compare surveillance recordings of the licensed homes with the attendance claims. Abdulrahman Ayman Alawad allegedly reported caring for 23 children in March 2026 and 25 children in April 2026, every day of both months. Recordings covering 57 of those days showed children entering or leaving his facility on only one day, prosecutors said: the day a state inspector made an unannounced visit, when the children and Alawad himself arrived after the inspector.
Border crossing records also contradict some of the claims, according to DOJ. A complaint against Turkiya Mamdouh Alawad says she left the United States on or about January 1, 2024, and returned around January 30, 2024. She still submitted attendance records for January and then received eight direct deposits totaling $14,970 in February 2024, prosecutors allege.
The complaints describe the alleged scheme as lucrative. DOJ says each defendant took in between $538,000 and $1.2 million over periods ranging from months to years. Abdulrahman Alawad allegedly received more than $300,000 from San Diego County, Child Development Associates and the YMCA in 2025 alone, and several defendants each received more than $1 million over the course of their schemes.
Who is prosecuting and what the charges carry
The defendants range in age from 22 to 63 and live in El Cajon and San Diego, according to DOJ. All 12 are charged with wire fraud, which carries a maximum of 20 years in prison and a $500,000 fine. Some also face money laundering charges with the same maximum penalties. The cases are being prosecuted by Assistant U.S. Attorney Eric R. Olah of the U.S. Attorney’s Office for the Southern District of California.
“These are the first charges alleging this type of fraud since the formation of the National Fraud Enforcement Division,” said U.S. Attorney Adam Gordon. Assistant Attorney General Colin M. McDonald, who leads that division, called fraud against child-care programs “an attack on vulnerable families.” Chief Jarod Koopman of IRS Criminal Investigation said investigators uncovered “twelve ghost daycare operations billing for children who were never present.” Assistant Director Michael Krol of Homeland Security Investigations said child-care programs “are intended to support children and working parents, not to enrich fraudsters,” and Special Agent in Charge Robb R. Breeden of the HHS Office of Inspector General said his office will keep pursuing such schemes. Deputy Assistant Attorney General Siddharth Dadhich, Antitrust Division Trial Attorney Sarah Fix and Assistant U.S. Attorney Oleksandra Johnson assisted earlier in the investigation.
What the case means for families and taxpayers
Subsidized child care is paid for with federal tax dollars, and each dollar billed for a child who was never present is a dollar not available for a family that needs care. Koopman said the alleged fraud “deprived working parents of critical support.” For grandparents who help arrange or pay for a grandchild’s care, the case also shows how the payment system works: providers are paid on signed monthly attendance sheets, so a parent’s or guardian’s signature is part of the safeguard.
The prosecution does not change the subsidy program for families who qualify, and it does not create a refund or claims process. Licensed providers and families who were not charged are not accused of wrongdoing. The next steps belong to the federal court in San Diego, where each defendant’s case will proceed separately.
High-profile cases also attract impostors. A call, text or social-media message that cites this case and asks for money, bank details or identification should be treated with caution; DOJ’s announcement gives no instruction for the public to provide personal information. Suspected fraud involving HHS-funded programs can be reported through the HHS Office of Inspector General.
Checking a caller who claims to be working the case
An impostor can sound convincing when the case is in the news and the names are real.
The Senior Fraud Defense & First-Hour Recovery Kit includes the family code word for confirming who is calling, a fraud evidence and report log, the first-hour recovery plan and the free credit-freeze steps if details have already been shared.
Set up a household plan with The Senior Fraud Defense & First-Hour Recovery Kit.
This article was prepared with AI assistance and reviewed against the linked official sources.
