12 Charged In $10M Daycare Fraud Schemes In San Diego County, Feds Say

SAN DIEGO — Twelve San Diego County residents face federal fraud charges after a probe revealed that over $10 million intended to help low-income families pay for childcare was instead funneled to fake daycare providers, federal authorities announced Tuesday.

More than 250 federal, state and local law enforcement officials arrested the dozen defendants and executed 12 search warrants early Thursday morning at homes purported to be used as daycares, according to the U.S. Department of Justice.

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"By following the money, IRS Criminal Investigation uncovered patterns of deceit that revealed twelve ghost daycare operations billing for children who were never present," Chief Jarod Koopman, of IRS Criminal Investigations, said in a news release.

"This was not a victimless crime. It deprived working parents of critical support and eroded trust in programs meant to protect the most vulnerable in our communities."

The Schemes

The U.S. Department of Health and Human Services provides federal funds to California to help low-income families pay for childcare, according to the department. In San Diego County, Child Development Associates and the YMCA administer childcare subsidy programs, authorities said.

When CDA or the YMCA determines a family qualifies for subsidized childcare, the organizations pay the eligible provider directly after the provider submits required monthly attendance records documenting care provided, according to the department. The records must be signed by both the provider and parent under penalty of perjury, authorities said.

"While the 12 federal complaints are unrelated, the scheme was essentially the same: Defendants obtained a California license to operate a home childcare facility and registered with Child Development Associates (CDA) and the YMCA to provide subsidized childcare to eligible families," the department said in the news release.

The defendants knowingly submitted false attendance records, claiming they provided childcare on dates and at times when they did not, according to the department, which added surveillance recordings of the defendants' licensed facilities conflicted with what they claimed in their attendance records.

Several defendants submitted attendance records claiming to have provided childcare at their homes when border crossing records show they were not even in the U.S., authorities said. The defendants are naturalized U.S. citizens and lawful permanent residents from Syria, Somalia, Sudan, Afghanistan and Iraq, according to the department.

Each defendant brought in between $538,000 and $1.2 million during time periods ranging from months to years, authorities said, adding several defendants have received over $1 million in payments in the course of their schemes.

The Charges

All 12 of the defendants are charged with wire fraud and some are charged with money laundering, authorities said. The penalty for both crimes is a maximum of 20 years in prison and a fine of up to $500,000, according to the department.

The defendants, as identified by the department, are listed below:

• 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 El Cajon;
• 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;
• Cezar Yaqoob, 36, of El Cajon.