Federal prosecutors have charged twelve foreign-born individuals with running a network of fake home daycares across San Diego that allegedly siphoned more than $10 million from taxpayer-funded childcare subsidies, according to a Justice Department announcement first reported by The Daily Wire.
More than 250 law enforcement officers fanned out across the city early Thursday to arrest the accused and execute search warrants on homes they had registered with the state as licensed childcare centers. Eleven of those taken into custody are naturalized U.S. citizens; the twelfth holds a green card and has a pending citizenship application.
The defendants trace their origins to Syria, Somalia, Afghanistan, Iraq, and Sudan, the department said.
How the alleged scheme worked
Prosecutors say the group obtained California licenses to operate home-based childcare centers, then enrolled with Child Development Associates and the YMCA to tap into a subsidy program that helps low-income families cover childcare costs. California receives funding for that program from the Department of Health and Human Services.
To collect, the defendants were required to submit monthly attendance records documenting the specific dates and times they cared for each child. Federal authorities allege those records were fabricated — billing the state and the nonprofits for children who were never on site.
One case cited by the Justice Department involved Abdulrahman Ayman Alawad, a 25-year-old born in Syria. He claimed his daycare served 23 children in March 2026 and 25 in April 2026, prosecutors said. But surveillance footage gathered over 57 days across those two months showed children coming and going on exactly one day — the day a state inspector arrived for an unannounced visit.
Alawad and the children appeared only after the inspector showed up, according to the department. Border crossing records also indicated that Alawad and several other defendants were outside the United States when they submitted attendance records claiming to have cared for children at their California facilities.
A second defendant, 63-year-old Turkiya Mamdouh Alawad of Syria, left the country around January 1, 2024, and returned about January 30, the Justice Department said. During that absence, she submitted attendance records to Child Development Associates and the YMCA for January 2024 and received eight direct deposits totaling $14,970 the following month.
Several of the accused collected more than $1 million in payments while running their operations, authorities said.
Charges and potential penalties
All twelve face wire fraud charges, which carry a maximum sentence of 20 years in prison and a $500,000 fine. Some of the defendants also face money laundering counts, which carry identical maximum penalties.
U.S. Attorney Adam Gordon framed the case as a turning point in enforcement. “Today is a bad day for home daycare fraud,” he said in a statement, noting these are the first charges of their kind brought since the Justice Department created its 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 described the operation as a sprawling scheme built on fabricated attendance logs. “By following the money, IRS Criminal Investigation uncovered patterns of deceit that revealed twelve ghost daycare operations billing for children who were never present,” he said.
Koopman pushed back on the idea that fraud against subsidy programs harms no one. “This was not a victimless crime,” he said. “It deprived working parents of critical support and eroded trust in programs meant to protect the most vulnerable in our communities.”
Part of a broader White House crackdown
The charges land amid a wider push by the White House Fraud Task Force, which Vice President JD Vance leads. In May, Vance announced that the administration was pausing enrollment of home health companies in Ohio’s Medicaid program for six months, following a Daily Wire investigative series by reporter Luke Rosiak that documented alleged widespread Medicaid fraud in the state’s home health sector.
On Monday, the Justice Department and the Small Business Administration announced that a summer enforcement effort targeting COVID-era fraud had produced charges against 160 defendants tied to roughly $245 million in intended losses.
Speaking at a press conference in Kansas City on Monday afternoon, Vance told The Daily Wire that officials in former President Joe Biden’s administration were aware of the fraud, calling it an “open secret.”
“Everybody knew people were skimming off the top,” he said. “Absolutely, we need to be looking into the officials who are turning a blind eye to this stuff.”
As of August 2026, the task force says it has identified nearly $230 billion in fraud, halted $56 billion in fraudulent payments, and secured more than $55 billion in indictments, civil penalties, and settlements.
Source: www.dailywire.com — https://www.dailywire.com/news/exclusive-a-dozen-foreign-born-individuals-ran-fake-daycares-to-steal-millions-from-taxpayers