Authored by Jill McLaughlin via The Epoch Times,
A dozen operators of allegedly fake daycare sites in Southern California were arrested last week on suspicion of stealing an estimated $10 million in funding, Justice Department officials announced on Sept. 15.
On Sept. 10, federal agents swarmed the San Diego-area homes listed as daycares by the operators and arrested the suspects, six males and six females.
Nine of the defendants entered the United States as refugees or asylum seekers from Syria, Somalia, Sudan, Afghanistan, and Iraq, according to court records. Eleven have since become naturalized citizens, according to Assistant Attorney General Colin McDonald of the Justice Department's National Fraud Enforcement Division.
"There were no children. There were no daycares. These daycares were fake and the taxpayers were paying for all of it," McDonald said during a news conference.
Each defendant was charged with one federal count of wire fraud in Operation Cradle to Grift. If convicted, they face a maximum penalty of 20 years in federal prison and a $500,000 fine.
Some defendants are also charged with money laundering, according to the Department of Justice (DOJ), which carries the same maximum prison term and fine.
"Fraud against these programs is an attack on vulnerable families, and law enforcement will continue to dismantle schemes that exploit them," McDonald said.
Criminal investigators followed a money train, uncovering more than $10 million in fraudulent billing, according to Chief Jarod Koopman of the IRS's criminal investigations division.
"This is not a victimless crime," Koopman said. "It deprived working parents of critical support and eroded trust in programs meant to protect the most vulnerable in our communities."
The U.S. Department of Health and Human Services sends federal funds to California to help low-income families pay for childcare. In San Diego County, childcare subsidy programs are administered by the county, the nonprofit Child Development Associates, and the YMCA.
When a family qualifies for funding, the childcare providers are paid directly after the provider submits monthly attendance records. The records are signed by the provider and the parents.
California laws prevent schools and childcare centers from collecting or sharing immigration information, allowing all parents to apply for the state's subsidized and free daycare assistance, which is paid in part by federal grant funding.
State law requires licensed childcare providers to be on site and ensure that children are supervised at all times. The 12 cases investigated in the San Diego area are unrelated, but they allegedly used the same formula, according to the DOJ.
The defendants allegedly were granted a childcare operating license by a California state agency and registered with the local programs.
Investigators accused the defendants of submitting fake attendance records and signing affidavits saying that they were accurate. Using the false records, the programs paid the operators with government funds, according to the allegations.
In one case, Abdulrahman Ayman Alawad, 25, a Syrian who lives in El Cajon, allegedly claimed that he provided childcare to 23 kids in March and 25 in April. He eventually received more than $300,000 in payments from San Diego County, the nonprofit Child Development Associates, and the YMCA in 2025, according to court records.
Alawad allegedly said he provided childcare every day of those two months. Investigators claimed that surveillance footage showed children entering or exiting the facility on just one day during those two months, which was the day a state inspector showed up for an unannounced visit.
Prosecutors also accused Alawad and several other defendants of submitting records claiming to have provided childcare at their homes when border crossing records showed that they were not in the United States.
Each defendant earned $538,000 to $1.2 million during their alleged schemes, which lasted from months to years, prosecutors said.
"Today is a bad day for home daycare fraud," said Adam Gordon, U.S. attorney for the Southern District of California.
Besides Alawad, the defendants are Fosiya Mohamoud, 50, of El Cajon, from Somalia; Zetun Abdi, 43, of San Diego, from Somalia; Ikramullah Mohmmand, 25, of El Cajon, from Afghanistan; Khetam Haouash, 37, of El Cajon, from Syria; Khatera Hashimi, 39, of El Cajon, from Afghanistan; Mariam Khamis, 42, of San Diego, from Sudan; Mohamad Alawad, 29, of San Diego, from Syria; Mazin Alawad, 22, of San Diego, from Syria; Turkiya Alawad, 63, of San Diego, from Syria; Zaryab Daudzai, 25, of El Cajon, from Afghanistan; and Cezar Yaqoob, 36, of El Cajon, from Iraq.
The operation was the work of the DOJ's National Fraud Enforcement Division, a task force to eliminate waste, fraud, and abuse in federal benefit programs chaired by Vice President JD Vance.
It was unclear whether the defendants had legal representation. They could not be contacted for comment.