NEW YORK — Federal authorities charged a dozen people Tuesday with fraudulently collecting more than $10 million in government child-care payments in San Diego County when the operators had few or even no children attending their facilities.
The charges, jointly announced in San Diego by the Justice Department and the criminal investigations division of the Internal Revenue Service, are the latest effort by the Trump administration to investigate and charge alleged cases of fraud and waste in government programs.
The 12 defendants said they were operating licensed, at-home child-care facilities in the San Diego area, submitting attendance records and documenting when each child attended and for what times, in order to collect payments from government child-care subsidy programs. However, federal prosecutors allege these at-home facilities rarely, if ever, had children. Defendants fraudulently collected from government programs for months or, in some cases, years, prosecutors alleged.
The federally funded assistance programs are intended to help low-income families afford child care so parents can work or go to school. After parents are accepted into a program, they select a child-care provider and the government reimburses the provider directly. But the programs don’t get enough money to cover all eligible families, forcing many parents onto growing waitlists.
Such a federally funded program led these defendants to allegedly operate these “ghost” day-care centers, prosecutors said.
“There were no children,” Colin McDonald, head of the Justice Department’s fraud enforcement division, said at a news conference. “There were no day cares. But the taxpayers were paying for all of it.”
The department’s fraud division was created in April, and this was the first indictment of its type since.
All 12 defendants were arrested Thursday and the charges against them were unsealed Tuesday. Prosecutors said the investigation continues.
Federal prosecutors said some of the defendants were not in the country when they were submitting claims for child-care payments. One defendant, Turkiya Alawad, 63, was found to be outside the U.S. between Jan. 1 and Jan. 30, 2024, but at the same time, submitted and collected for child-care payments for the dates they were away, prosecutors allege.
Another defendant, Abdulrahman Alawad, 25, claimed to provide child care to children in March and April, but surveillance footage allegedly shows children entered Alawad’s facility only once, on the day a state inspector showed up. Alawad is alleged to have received more than $300,000 in payments from child-care programs in 2025.
Other defendants collected more than $1 million in child-care subsidy payments, prosecutors alleged. Jared Koopman, head of the IRS’ criminal investigations division, told reporters the defendants then allegedly used the proceeds to purchase luxury homes, send money overseas through wire transfers and make large cash withdrawals.
“These are taxpayer-funded programs designed to help working families, children and vulnerable communities,” Koopman said. “When those funds are diverted for personal profit, families lose, honest providers lose, taxpayers lose and the public trust in these programs is damaged.”
Although several of the defendants have similar last names, the Justice Department’s McDonald told reporters each investigation and indictment was reached independently.
The indictments in Southern California have similarities to what happened with Minnesota-based Feeding Our Future. Federal prosecutors charged Feeding Our Future with scamming Minnesota and federal taxpayers out of millions of dollars of child-care and meal subsidies.
The alleged day-care fraud case in California is larger than the one with Feeding Our Future, which submitted roughly $4.6 million in claims to the child-care assistance program. However, the Feeding Our Future case was much more focused on fraud in meal subsidy programs than child care.
The operator of the Feeding Our Future’s child-care facility, Fahima Mahamud, 50, pleaded guilty to conspiracy and wire fraud charges in July. The facility’s leader, Aimee Bock, was convicted and sentenced to nearly 42 years in prison in May for fraud and conspiracy charges. She has appealed her conviction. Nearly 80 people have been charged and dozens have been convicted since federal authorities announced their first indictments related to the fraud happening at Feeding Our Future in 2022.
The IRS’ criminal investigations division had been looking into these child-care facilities going back to at least February. While the IRS is mostly known for the enforcement of tax law, the investigations division is one of the arms of the federal government that often focus on white-collar crimes.
The Trump administration has put a heavy emphasis on investigating and charging alleged fraud and abuse of government benefit programs. Vice President JD Vance chairs the administration’s task force on the effort. McDonald said the public should expect more investigations and indictments in the coming months.
But some of their efforts have faced criticism and legal challenges. In December, Vance amplified a YouTube video of a popular right-wing influencer accusing child-care providers, many of them immigrants from Somalia, of running scams. State authorities visited the centers and found nearly all of them operating normally. Nonetheless, the administration launched a massive immigration crackdown in Minnesota. Officials later attempted to freeze federal funds for child care in five Democratic-led states but were halted by a lawsuit.
Sweet writes for the Associated Press. AP writer Moriah Balingit in Washington contributed to this report.
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