Federal prosecutors in San Diego have charged 12 licensed home childcare operators with fraudulently collecting more than $10 million in government subsidies meant to help low-income families pay for childcare. Authorities announced the charges on Tuesday, September 15, 2026, after a coordinated operation last week that they described as targeting so-called ghost daycares: licensed homes that billed for children who, prosecutors allege, were rarely or never present.
More than 250 federal, state, and local officers arrested all 12 defendants on Thursday, September 10, and executed search warrants at homes in San Diego and El Cajon that were listed as daycare sites. The defendants, six men and six women ranging in age from 22 to 63, are naturalized U.S. citizens and lawful permanent residents originally from Syria, Somalia, Sudan, Afghanistan, and Iraq. Officials said all but one are U.S. citizens and that nine entered the country seeking refugee status. None has been convicted.
The charges remain allegations, and the defendants are presumed innocent unless proven guilty in court. The cases were filed as 12 separate federal complaints rather than a single conspiracy indictment. Prosecutors said the pattern was essentially the same. Each defendant obtained a California license to operate a home childcare facility, then registered with Child Development Associates and the YMCA of San Diego County, the local agencies that administer subsidy payments using federal funds provided through the U.S.
Department of Health and Human Services. To get paid, providers must submit monthly attendance records, signed under penalty of perjury by both the provider and a parent, listing the dates and times each child was in care. According to the complaints, the defendants knowingly submitted false records claiming they provided care on days and at hours when they did not. Child Development Associates and the YMCA then issued payments based on those records.
California law generally requires a licensed provider to be present and to supervise children at all times, except for limited absences when a qualified substitute is on site. Investigators said surveillance and travel records undercut the attendance claims. In one of the most detailed examples, Abdulrahman Alawad, 25, of El Cajon, submitted records stating he cared for 23 children in March 2026 and 25 children in April 2026, and that he provided care every day of those two months.
Federal officials said recordings covering 57 days showed children entering or leaving the property on only one day: the date of an unannounced state inspection. Authorities alleged that Alawad and the children arrived after the inspector was already there. The complaints state that Alawad received more than $300,000 in payments from San Diego County, Child Development Associates, and the YMCA in 2025 alone. Prosecutors also alleged that some operators billed for care while they were outside the United States.
Border records cited in a complaint against Turkiya Alawad, 63, of San Diego, show she left the country around January 1, 2024, and returned around January 30, 2024. She still submitted January attendance records, officials said, and later received eight direct deposits totaling $14,970. Officials said Abdulrahman Alawad and several other defendants likewise claimed to be providing care at times when border records placed them abroad. Other surveillance examples described in court papers and at the news conference followed a similar theme.
Prosecutors said Mohamad Alawad, 29, of San Diego, claimed to care for 11 to 13 children every day during a stretch of weeks, while video showed no children entering the facility on 22 of 38 days reviewed. In another case, agents watching an El Cajon home for 36 days in May and June allegedly never saw more than three children arrive on a single day, and investigators believed two of those children were the operator’s own.
The financial scale, if the allegations are proven, is substantial. Each defendant is accused of collecting between $538,000 and $1.2 million over periods ranging from months to years. Several allegedly received more than $1 million. IRS Criminal Investigation Chief Jarod Koopman said agents following the money found patterns consistent with billing for children who were never present.
He told reporters the proceeds were allegedly used to buy luxury homes, send wire transfers overseas, and make large cash withdrawals.
The charged defendants are Fosiya Mohamoud, 50, of El Cajon; Abdulrahman Alawad, 25, of El Cajon; Zetun Abdi, 43, of San Diego; Ikramullah Mohmmand, 25, of El Cajon; Khetam Haouash, 37, of El Cajon; Khatera Hashimi, 39, of San Diego; Mariam Khamis, 42, of San Diego; Mohamad Alawad, 29, of San Diego; Mazin Alawad, 22, of San Diego; Turkiya Alawad, 63, of San Diego; Zaryab Daudzai, 25, of El Cajon; and Cezar Yaqoob, 36, of El Cajon.
All 12 face wire fraud charges, which carry a maximum penalty of 20 years in prison and a $500,000 fine. Some also face money laundering charges with the same maximum exposure. Court records indicated that most had been released on bail by Tuesday. Attorneys listed for the defendants did not respond to requests for comment after the announcement.
The investigation, called Operation Cradle to Grift, began in February and was led by prosecutors in the Southern District of California working with IRS Criminal Investigation, Homeland Security Investigations, the HHS Office of Inspector General, and state and local partners. Officials said it is among the first cases of this kind charged since the Justice Department formed its National Fraud Enforcement Division. Assistant Attorney General Colin M.
McDonald said the charges show that “anyone who steals from programs meant to support children will face swift and uncompromising accountability.” U.S. Attorney Adam Gordon called the announcement “a bad day for home daycare fraud.” Prosecutors emphasized that the programs exist so working parents can afford licensed care.
If the allegations hold, the money billed for empty rooms never reached children who needed it. The investigation remains open, and the government has not said whether additional charges will follow. What happens next will be decided in federal court, where the complaints will have to be proven beyond a reasonable doubt.
