“These fraudsters may have criminally gamed the system before. But today, the game is over.”
minute read
Twelve people have been charged in an alleged $10 million fraud scheme that federal prosecutors say used bogus home daycare operations to siphon taxpayer-funded childcare benefits intended for low-income families.
Federal authorities arrested all 12 defendants during a coordinated San Diego-area operation involving more than 250 federal, state, and local law enforcement personnel. Investigators also executed 12 search warrants at homes purportedly operating as daycare facilities. The defendants are naturalized US citizens or lawful permanent residents originally from Syria, Somalia, Sudan, Afghanistan, and Iraq, according to the Department of Justice.
Prosecutors allege the defendants operated what investigators described as “ghost daycare operations,” submitting attendance records for children who were allegedly not actually receiving care.
The federal government provides funding to California to subsidize childcare for low-income families. In San Diego County, Child Development Associates (CDA), the YMCA and the county administer programs that pay eligible childcare providers directly after receiving monthly attendance records.
Those records are required to document when children were actually in care and must be signed by the provider and parent under penalty of perjury.
Although the 12 criminal complaints are separate, prosecutors said they describe essentially the same alleged scheme. The defendants obtained California licenses to operate home childcare facilities and registered to receive subsidized childcare payments before allegedly submitting false attendance records to obtain federal funds.
Surveillance cited in the complaints allegedly showed striking discrepancies between the attendance records and activity at the daycare locations.
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.
But surveillance covering 57 days allegedly showed children entering or leaving the facility on only one day.
That day, prosecutors said, happened to coincide with an unannounced visit by a state inspector. According to the complaint, children and Alawad himself arrived only after the inspector had already shown up.
Investigators also allege some defendants billed the programs for childcare supposedly provided while they were outside the United States.
According to one complaint, border records showed Turkiya Mamdouh Alawad left the US around Jan. 1, 2024, and did not return until approximately Jan. 30. She nevertheless allegedly submitted January childcare attendance records and subsequently received eight direct deposits from CDA and the YMCA totaling $14,970.
The alleged schemes generated substantial payouts. Prosecutors said individual defendants received between approximately $538,000 and $1.2 million over periods ranging from months to years.
Several allegedly collected more than $1 million each, while Abdulrahman Alawad received more than $300,000 from San Diego County, CDA, and the YMCA in 2025 alone.
“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 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. They range in age from 22 to 63 years old and reside in San Diego or El Cajon, CA.
All 12 face federal wire fraud charges, while some also face money laundering charges.
“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.”
Federal authorities arrested all 12 defendants during a coordinated San Diego-area operation involving more than 250 federal, state, and local law enforcement personnel. Investigators also executed 12 search warrants at homes purportedly operating as daycare facilities. The defendants are naturalized US citizens or lawful permanent residents originally from Syria, Somalia, Sudan, Afghanistan, and Iraq, according to the Department of Justice.
Prosecutors allege the defendants operated what investigators described as “ghost daycare operations,” submitting attendance records for children who were allegedly not actually receiving care.
The federal government provides funding to California to subsidize childcare for low-income families. In San Diego County, Child Development Associates (CDA), the YMCA and the county administer programs that pay eligible childcare providers directly after receiving monthly attendance records.
Those records are required to document when children were actually in care and must be signed by the provider and parent under penalty of perjury.
Although the 12 criminal complaints are separate, prosecutors said they describe essentially the same alleged scheme. The defendants obtained California licenses to operate home childcare facilities and registered to receive subsidized childcare payments before allegedly submitting false attendance records to obtain federal funds.
Surveillance cited in the complaints allegedly showed striking discrepancies between the attendance records and activity at the daycare locations.
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.
But surveillance covering 57 days allegedly showed children entering or leaving the facility on only one day.
That day, prosecutors said, happened to coincide with an unannounced visit by a state inspector. According to the complaint, children and Alawad himself arrived only after the inspector had already shown up.
Investigators also allege some defendants billed the programs for childcare supposedly provided while they were outside the United States.
According to one complaint, border records showed Turkiya Mamdouh Alawad left the US around Jan. 1, 2024, and did not return until approximately Jan. 30. She nevertheless allegedly submitted January childcare attendance records and subsequently received eight direct deposits from CDA and the YMCA totaling $14,970.
The alleged schemes generated substantial payouts. Prosecutors said individual defendants received between approximately $538,000 and $1.2 million over periods ranging from months to years.
Several allegedly collected more than $1 million each, while Abdulrahman Alawad received more than $300,000 from San Diego County, CDA, and the YMCA in 2025 alone.
“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 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. They range in age from 22 to 63 years old and reside in San Diego or El Cajon, CA.
All 12 face federal wire fraud charges, while some also face money laundering charges.
“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.”
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