San Diego daycare fraud bust involves $10M in stolen subsidies

childcare subsidy fraud ghost daycares San Diego federal indictment taxpayer fraud

Federal authorities have charged 12 individuals in a massive childcare subsidy fraud scheme in San Diego, California, involving more than $10 million in taxpayer funds. The defendants, who are naturalized U.S. citizens or lawful permanent residents from Syria, Afghanistan, Sudan, Iraq, and Somalia, allegedly operated “ghost daycares” that existed primarily on paper.

Prosecutors allege the defendants obtained California licenses and registered with organizations like the YMCA and Child Development Associates to submit falsified attendance records. Surveillance footage reportedly contradicted these claims; in one instance, a defendant claimed to care for dozens of children daily, yet footage showed children entering or leaving the facility only once, on the day a state inspector arrived.

Some defendants allegedly collected between $538,000 and $1.2 million each. In one case, a defendant reportedly submitted claims while being outside the United States. The investigation, a joint effort by the Department of Justice and the IRS Criminal Investigation division, is part of a broader crackdown on government program fraud and waste.

Entities

Abdulrahman Alawad · Colin McDonald · Department of Justice · IRS · Internal Revenue Service · San Diego · Southern California · Todd Blanche · Turkiya Alawad

Claims

What the coverage asserts, and how many sources carry each claim.

[● 2 SOURCES] Turkiya Alawad submitted and collected childcare payments while outside the United States in January 2024. abc30.com · wtop.com
[● 3 SOURCES] The facilities rarely, if ever, had children attending despite submitted attendance records. abc30.com · wtop.com
[● 2 SOURCES] Abdulrahman Alawad allegedly received more than $300,000 in childcare payments in 2025. abc30.com · wtop.com
[● 2 SOURCES] Some defendants were not in the country when they were submitting claims for childcare payments. abc30.com · wtop.com
[● 3 SOURCES] Twelve individuals are charged with fraudulently collecting over $10 million in government childcare subsidy payments. abc30.com · wtop.com
[● 3 SOURCES] The defendants operated licensed, at-home childcare facilities in Southern California. abc30.com · wtop.com