‘Cradle to Grift’: 12 people arrested, charged in $10M daycare fraud scheme
Twelve people have been charged in connection with an alleged $10 million fraud scheme involving 12 “ghost daycare centers” in the San Diego area, according to the U.S. Department of Justice, which has dubbed the crackdown “Operation Cradle to Grift.”
Assistant Attorney General Colin McDonald of the DOJ's National Fraud Enforcement Division said at a press conference on Sept. 15 that more than $10 million in taxpayer money that was “supposed to support our children were stolen by criminal actors.” The operation that brought the alleged fraudsters to justice was part of “the most comprehensive anti-fraud strategy in history,” he added.
All 12 defendants had been arrested the previous Thursday, in a coordinated takedown involving more than 250 federal, state and local law enforcement officers, who executed 12 search warrants at San Diego-area homes purported to be daycare facilities. The charges against the defendants were unsealed Tuesday.
“This includes creating the first new division at the DOJ in 20 years, the National Fraud Enforcement Division,” he said. “Our mission is clear: stop the fraud epidemic crippling our country. As we confront fraud, we refuse to accept it as an unavoidable evil across our vast benefit programs.”
“It is simply evil. And unabated, this evil erodes trust in our government, weakens our financial stability, crushes the soul of law-abiding citizens, and perhaps worst of all, hardens the conscience of the evil-doer. We are resolved to reverse these trends.”
According to a DOJ press release, the 12 arrested individuals all lived in El Cajon or San Diego and included: Fosiya Mohamoud, a 50-year-old native of Somalia; Abdulrahman Alawad, a 25-year-old native of Syria; Zetun Abdi, 43, of Somalia; Ikramullah Mohmmand, 25, of Afghanistan; Khetam Haouash, 37, of Syria; Khatera Hashimi, 39, of Afghanistan; Mariam Khamis, 42, of Sudan; Mohamad Alawad, 29, of Syria; Mazin Alawad, 22, of Syria; Turkiya Alawad, 63, of Syria; Zaryab Daudzai, 25, of Afghanistan; and Cezar Yaqoob, 36, of Iraq.
The arrestees face charges including wire fraud and money laundering, each carrying a maximum penalty of 20 years in prison and a $500,000 fine. While all 12 face wire fraud charges, not all face money laundering charges.
According to the DOJ press release, the defendants each obtained a license in California to operate a home childcare facility. They registered with Child Development Associates and the YMCA to provide subsidized childcare for eligible families.
To obtain government-funded payments, the defendants knowingly submitted false attendance records each month. As a result, CDA and the YMCA issued federally-funded payments meant for childcare for low-income families.
Prosecutors say some defendants collected payments even while out of the country; one defendant, Turkiya Alawad, was allegedly outside the U.S. for the entire month of January 2024 yet still submitted and collected childcare payments for those dates, according to federal authorities.
The DOJ alleges that each defendant brought in between $538,000 and $1.2 million through their schemes over periods ranging from months to years before they were apprehended.
In May, the Trump administration promoted what it called “an unrelenting, full-scale assault on the fraudsters, scammers, and corrupt operators who have looted billions from American taxpayers.”
This included federal prosecutors charging 11 people in a major real estate and loan fraud scheme that targeted senior citizens in California, prosecuting over a dozen people involved in a $50 million hospice fraud scheme, and issuing criminal warrants on 20 Minnesota businesses suspected of SNAP fraud.
“This is only the beginning,” the White House stated in May. “The Trump administration will continue this relentless effort until every scheme is exposed, every dollar possible is recovered, and the American people’s trust in their government is restored.”
