Federal, state and local agents arrested all twelve defendants in a single early-morning sweep Thursday, unwinding a scheme prosecutors say siphoned more than $10 million meant to help low-income San Diego families pay for childcare into a network of “ghost” home daycares that billed for children who were never actually in care. The U.S. Attorney’s Office for the Southern District of California announced the charges Tuesday, alongside a coordinated operation involving more than 250 federal, state and local law enforcement officers who executed 12 search warrants at homes across San Diego that were licensed as daycare facilities.
According to prosecutors, each of the 12 federal complaints describes a similar scheme, even though the cases are legally unrelated to one another. The Department of Health and Human Services funds childcare subsidies for low-income California families, and in San Diego County those subsidies are administered locally by the County of San Diego, Child Development Associates (CDA), and the YMCA. To get paid, a licensed home daycare provider submits monthly attendance records, signed by both provider and parent under penalty of perjury, documenting the dates and times each child was actually in care. Prosecutors allege the twelve defendants instead submitted false attendance records for children who were not present, falsely certified the records as accurate, and collected government payments they were not entitled to.
IRS Criminal Investigation Chief Jarod Koopman said tracing the money “revealed twelve ghost daycare operations billing for children who were never present,” calling it “not a victimless crime” because it “deprived working parents of critical support.” Homeland Security Investigations Assistant Director Michael Krol and HHS Office of Inspector General Special Agent in Charge Robb R. Breeden likewise framed the case as an attack on programs meant to serve vulnerable families. U.S. Attorney Adam Gordon put it more bluntly: “Today is a bad day for home daycare fraud. These fraudsters may have criminally gamed the system before. But today, the game is over.”
The twelve defendants named in the U.S. Attorney’s Office’s release, each charged in a separate criminal complaint, are: Fosiya Mohamoud, 50, of El Cajon (case 26-mj-05074); Abdulrahman Alawad, 25, of El Cajon (26-mj-05174); Zetun Abdi, 43, of San Diego (26-mj-05184); Ikramullah Mohmmand, 25, of El Cajon (26-mj-05185); Khetam Haouash, 37, of El Cajon (26-mj-05187); Khatera Hashimi, 39, of El Cajon (26-mj-05188); Mariam Khamis, 42, of San Diego (26-mj-05189); Mohamad Alawad, 29, of San Diego (26-mj-05190); Mazin Alawad, 22, of San Diego (26-mj-05191); Turkiya Alawad, 63, of San Diego (26-mj-05194); Zaryab Daudzai, 25, of El Cajon (26-mj-05195); and Cezar Yaqoob, 36, of El Cajon (26-mj-05215). Four defendants share the Alawad surname, suggesting at least one family was allegedly involved in the scheme across multiple daycare licenses, though the release does not specify the nature of any relationship between them.
Notably, Assistant Attorney General Colin M. McDonald, who spoke at Tuesday’s announcement, said the case marks “the first charges alleging this type of fraud since the formation of the National Fraud Enforcement Division.” That division is itself new: President Trump ordered its creation in January 2026 as part of a governmentwide task force on fraud chaired by Vice President JD Vance, and the Senate confirmed McDonald, a longtime Southern District of California prosecutor, to lead it by a 52-47 vote in March 2026, according to an Associated Press report carried by WTOP. The division absorbed the Justice Department’s Tax Section, Health Care Fraud Unit, and Market, Government, and Consumer Fraud Unit that April, per a client alert from law firm Ropes & Gray describing McDonald’s August 2026 enforcement-priorities memo. Its creation followed intense scrutiny of a much larger Minnesota daycare fraud scandal, in which state officials and prosecutors have pursued fraud allegations tied to more than $9 billion across 14 federally funded programs, including daycare providers enrolled in the state’s Child Care Assistance Program.
Tuesday’s case is not the Southern District of California’s first brush with home childcare fraud. In 2023, the same office charged four people, including the president of a University Avenue vocational school, with a scheme that used false employment and school-enrollment verifications to fraudulently draw more than $3.7 million from the same CDA/YMCA-administered subsidy program; that case ended in prison sentences and a $3.7 million restitution order in 2024, according to the U.S. Attorney’s Office’s original charging announcement. Tuesday’s dollar figure, at more than $10 million, is nearly three times the size of that earlier case.