Federal prosecutors on Tuesday charged 12 people in Southern California with childcare payment fraud, alleging the group siphoned more than $10 million from government subsidy programs by billing for children who rarely, if ever, attended their facilities.
The charges were announced in San Diego by the Department of Justice and the Internal Revenue Service’s Criminal Investigation division. Officials said the case reflects an ongoing push by the Trump administration to pursue suspected fraud and waste in federal benefit programs.
Childcare payment fraud allegations outlined
According to court filings, the defendants said they operated licensed, at-home childcare businesses and submitted attendance logs to obtain public reimbursement. Prosecutors contend the facilities had few or no children present and that several defendants filed false claims for months or years.
All 12 defendants were arrested Thursday, and the indictments were unsealed Tuesday.
In one example, prosecutors said Turkiya Alawad, 63, was outside the United States between January 1, 2024, and January 30, 2024, yet claims were submitted and paid for care allegedly provided during that period. In another case, prosecutors allege surveillance showed children entered the facility of defendant Abdulrahman Alawad, 25, only once, coinciding with a state inspection, even though he claimed to provide care in March and April. He is alleged to have received more than $300,000 from childcare programs in 2025.
Prosecutors said some other defendants each collected more than $1 million in subsidy payments.
Comparisons to other subsidy cases
Authorities noted similarities to the Minnesota-based Feeding Our Future investigation, in which federal prosecutors alleged a scheme that defrauded taxpayers of childcare and meal subsidies. The California case is larger than the portion of Feeding Our Future tied to the Child Care Assistance Program, which involved about $4.6 million in claims, though the Minnesota case focused more on meal benefits than childcare.
In that matter, the operator of Feeding Our Future’s childcare facility, Fahima Mahamud, 50, pleaded guilty to conspiracy and wire fraud in July. The organization’s leader, Aimee Bock, was convicted in May on fraud and conspiracy charges and sentenced to 41 years in prison. She has appealed.
IRS role and administration emphasis
The IRS’s Criminal Investigation division said it has examined the California childcare operations for several months. While CI is best known for enforcing tax laws, the unit often leads complex white-collar fraud investigations.
According to officials, the Trump administration has prioritized rooting out alleged fraud and abuse in government programs. Vice President JD Vance chairs the administration’s task force overseeing the effort.