12 Charged in $10M Childcare Payment Fraud Scheme in Southern California
Federal authorities charged a dozen people for collecting over $10M in government childcare subsidies for facilities that rarely, if ever, had children present.
Dozen Suspects Arrested in California Childcare Subsidy Scam
Federal authorities have charged 12 people with fraudulently collecting more than $10 million in government childcare payments, ABC News US reports. The defendants claimed to operate licensed, at-home childcare facilities in Southern California — but prosecutors say few or no children were ever actually present.
The charges were announced jointly in San Diego by the Justice Department and the criminal investigations division of the IRS. All 12 defendants were arrested Thursday; the charges were unsealed Tuesday.
The defendants submitted attendance records documenting which children were present and at what times, in order to draw payments from government childcare subsidy programs. Federal prosecutors allege those records were largely fabricated, with defendants collecting fraudulent payments for months or, in some cases, years.
Among the defendants, Turkiya Alawad, 63, was found to have been outside the United States between January 1 and January 30, 2024, while simultaneously submitting and collecting childcare payment claims for those same dates, prosecutors say.
A second defendant, Abdulrahman Alawad, 25, claimed to provide childcare during March and April. Surveillance footage allegedly shows children entered his facility on only one occasion — the day a state inspector visited. Alawad is alleged to have received more than $300,000 in childcare program payments in 2025 alone. Other defendants are accused of collecting more than $1 million each in subsidy payments, prosecutors said.
The IRS Criminal Investigations Division had been examining these facilities for several months. Though the agency is primarily associated with tax enforcement, its investigations arm frequently handles white-collar crime cases.
Prosecutors drew comparisons to the Minnesota-based Feeding Our Future case, in which federal charges alleged millions in childcare and meal subsidy fraud. The California case is larger: Feeding Our Future submitted roughly $4.6 million in claims to the Child Care Assistance Program, while the current scheme exceeds $10 million. The Feeding Our Future matter was also more heavily centered on meal subsidy fraud than childcare payments specifically.
Feeding Our Future's childcare facility operator, Fahima Mahamud, 50, pleaded guilty to conspiracy and wire fraud charges in July. The organization's leader, Aimee Bock, was convicted in May and sentenced to 41 years in prison on fraud and conspiracy charges; she has appealed.
The charges form part of a broader enforcement push by the Trump administration targeting alleged fraud in government benefit programs. Vice President JD Vance chairs the administration's task force overseeing that effort.
Source: ABC News US