Operation Cradle to Grift: DOJ Charges 12 Foreign-Born Defendants in $10M San Diego ‘Ghost Daycare’ Fraud

Attorney General Todd Blanche highlighted a coordinated federal takedown Tuesday as the Justice Department charged 12 individuals with siphoning more than $10 million from programs meant to help low-income families pay for childcare. The defendants, naturalized U.S. citizens and lawful permanent residents originally from Syria, Somalia, Sudan, Afghanistan, and Iraq, allegedly ran licensed home daycares that existed largely on paper. 

More than 250 federal, state, and local officers arrested all 12 defendants and executed search warrants at homes in the San Diego area purported to be daycare facilities. The National Fraud Enforcement Division, created earlier this year, called the cases its first charges of this type. 

🚨 @AAGMcDonald announces with @SDCAnews that 12 individuals were charged in $10 MILLION Home Daycare Fraud Schemes⬇️ pic.twitter.com/24cmolEGBK

— National Fraud Enforcement Division (@DOJFraudDiv) September 15, 2026

“These charges underscore a simple truth: anyone who steals from programs meant to support children will face swift and uncompromising accountability,” said Assistant Attorney General Colin M. McDonald. “Fraud against these programs is an attack on vulnerable families, and law enforcement will continue to dismantle schemes that exploit them.” 

At a news conference, McDonald revealed: “There were no children. There were no daycares. But the taxpayers were paying for all of it,” adding, “our mission is clear, stop the fraud epidemic crippling our country…fraud is an unavoidable evil. It is simply evil.”

U.S. Attorney Adam Gordon for the Southern District of California said, “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 charged defendants are:

• Fosiya Mohamoud, 50, of El Cajon (Somalia)
• Abdulrahman Alawad, 25, of El Cajon (Syria)
• Zetun Abdi, 43, of San Diego (Somalia)
• Ikramullah Mohmmand, 25, of El Cajon (Afghanistan)
• Khetam Haouash, 37, of El Cajon (Syria)
• Khatera Hashimi, 39, of El Cajon (Afghanistan)
• Mariam Khamis, 42, of San Diego (Sudan)
• Mohamad Alawad, 29, of San Diego (Syria)
• Mazin Alawad, 22, of San Diego (Syria)
• Turkiya Alawad, 63, of San Diego (Syria)
• Zaryab Daudzai, 25, of El Cajon (Afghanistan)
• Cezar Yaqoob, 36, of El Cajon (Iraq) 

Prosecutors say the scheme was straightforward. The defendants obtained California licenses to operate home childcare facilities, registered with Child Development Associates and the YMCA to receive federal subsidy payments, then submitted monthly attendance records—signed under penalty of perjury—claiming they cared for children who were rarely, if ever, present. Payments flowed directly to the providers. 

Each defendant allegedly collected between $538,000 and $1.2 million over periods ranging from months to years. Several received more than $1 million. Abdulrahman Alawad alone collected more than $300,000 in 2025. IRS investigators say proceeds went to luxury homes, overseas wire transfers, and large cash withdrawals. 

Surveillance footage and border-crossing records contradicted the signed attendance forms.

Abdulrahman Alawad claimed to care for 23 children in March 2026 and 25 in April, every day. Video covering 57 days showed children entering or leaving his facility on only one day—the day a state inspector arrived unannounced. Turkiya Alawad submitted January 2024 attendance records and collected nearly $15,000 even though border records show she was outside the United States that entire month. 

The pattern was not a secret to anyone willing to look at public records.

Independent journalist Nick Shirley first drew national attention with videos of empty, Somali-run daycares in Minnesota that were collecting large public subsidies. He then came to San Diego and worked with local licensed private investigator Amy Reichert, who pulled Community Care Licensing inspection files showing facilities licensed for dozens of children while unannounced visits repeatedly found few or none present. Reichert posted the state reports—names, enrollment numbers, and empty-room findings—and the pair visited sites in City Heights and El Cajon. 

Reichert reports that many of the daycares they had uncovered have been closed and the owners arrested. 

Here is a ghost daycare where a man was arrested in San Diego. 11 out of the 12 arrests were refugees who started committing fraud just 2 years after entering the United States & the DOJ says they stole MILLIONS from taxpayers. pic.twitter.com/CI3DEgzH73

— Amy Reichert (@amyforsandiego) September 15, 2026

Shirley later alleged more than $170 million in California daycare and hospice irregularities and said the problem here was larger than Minnesota. 

California officials answered with smears and legislation, not audits. 

Governor Gavin Newsom’s press office posted an AI-generated image of a grim reaper figure filming at a daycare doorway with the caption “Hey, can I see your kids?”—a depiction widely condemned as implying Shirley was a predator. Newsom had earlier said Somali providers were “under siege.” 

In August, Newsom signed Assembly Bill 2624, authored by Assemblymember Mia Bonta, wife of Attorney General Rob Bonta. Republicans, led by San Diego Assemblyman Carl DeMaio, dubbed it the “Stop Nick Shirley Act.” The law expands California’s Safe at Home address-confidentiality program to employees and volunteers at nonprofits that serve immigrants. Critics said the measure was designed to intimidate investigators shining a light on fraud in immigrant communities after Shirley’s California reporting.

When CMS Administrator Dr. Mehmet Oz highlighted Los Angeles as an epicenter of hospice fraud and noted concentration among certain operators, Newsom’s office filed a civil rights complaint accusing Oz of “baseless and racially charged allegations” against Armenian Americans and Democrats branded the CMS chief a racist. 

The state then sued to block federal childcare-funding freezes tied to fraud concerns. Those smears and denials have been answered by Tuesday’s charges. 

California Globe has documented how Newsom’s Medi-Cal expansion enrolled large numbers later deemed ineligible, including people failing citizenship and residency rules, at a cost of billions; how CMS labeled California the “worst offender” in a $1.8 billion improper-Medicaid scandal; and how the administration deferred $1.3 billion over hospice and home-health “ghost” operations in Los Angeles. 

Citizen investigators with cameras and public records were defamed by Democrats as racists and pedophiles. Federal prosecutors answered with warrants, bank records, and border data, charging 12 people from Syria, Somalia, Sudan, Afghanistan, and Iraq with treating taxpayer childcare money as a personal ATM. 

All face wire-fraud charges carrying up to 20 years. Some also face money-laundering counts. The investigation continues.