12 Arrested in Alleged $10 Million Childcare Fraud Scheme

Federal authorities have arrested 12 individuals accused of operating an elaborate fraud scheme that allegedly funneled over $10 million in taxpayer-funded childcare subsidies to nonexistent providers. The defendants, all naturalized citizens from Syria, Afghanistan, Sudan, Iraq, and Somalia, were arrested early Thursday morning as part of a large-scale operation involving more than 250 law enforcement officials across federal, state, and local agencies.

Investigators allege the defendants obtained licenses for home-based childcare facilities in San Diego. They then purportedly submitted fraudulent attendance records to government programs, including those managed by Child Development Associates and the YMCA, to collect payments for children who were never in their care. The scheme allegedly involved submitting falsified documentation, certifying attendance under penalty of perjury, to receive government funds.

Surveillance footage and other investigative methods reportedly revealed discrepancies between the documented attendance and actual activity at the purported daycare sites. In one instance cited by prosecutors, Abdulrahman Ayman Alawad allegedly claimed to care for 23 to 25 children daily in March and April 2026. However, surveillance over 57 days reportedly showed children present at his facility on only one day, coinciding with a state inspector's visit.

Another defendant, Turkiya Mamdouh Alawad, allegedly submitted January 2024 attendance records and received over $14,900 in childcare subsidies, despite border records indicating she left the country on January 1, 2024, and did not return until January 30, 2024.

Authorities stated that the alleged profits from the scheme were substantial, with individual defendants reportedly collecting between $538,000 and over $1.2 million. Some defendants are accused of receiving more than $1 million each, and one allegedly obtained over $300,000 in 2025 alone.

U.S. Attorney General Todd Blanche stated that these "shameless attempts to steal taxpayer-funded childcare funds for personal gain endanger support for some of our nation's most vulnerable children." The complaints, while stemming from separate cases, reportedly follow a similar pattern of fabricated attendance claims and the siphoning of funds intended for low-income families.

All 12 defendants face wire fraud charges, each carrying a maximum penalty of 20 years in prison and a $500,000 fine. Some also face money-laundering charges with similar maximum penalties. The operation included the execution of 12 search warrants at locations in San Diego believed to be used as fraudulent daycare facilities.