Federal authorities have charged 12 individuals from Somalia, Afghanistan, Iraq, Sudan, and Syria immigrants in an epic $10 million “ghost daycare” fraud scheme in San Diego, California.
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Breitbart reports that the individuals charged had claimed to provide low-income families with home day care while funneling the taxpayer-funded money to themselves.
The U.S. Department of Justice (DOJ) and federal prosecutors say the defendants allegedly set up sham at-home childcare operations to exploit taxpayer funds.
AG Todd Blanche announces arrest of 12 individuals involved in day care fraud in California
So it took the DOJ to make a move when it was BROUGHT TO CALIFORNIA’s attention WHO literally attacked the people exposing the fraud, IGNORED the evidence of the fraud AND passed a bill…
— Anthony Kort (@AnthonyKort) September 15, 2026
During a press conference on Tuesday, U.S. Attorney Adam Gordon said, “Today is a bad day for home daycare fraud. These are the first charges alleging this type of fraud since the formation of the National Fraud Enforcement Division. These fraudsters may have criminally gamed the system before. But today, the game is over.”
According to a DOJ press release, more than 250 federal, state and local law enforcement officials arrested all 12 defendants in a coordinated takedown early Thursday morning and executed 12 search warrants at homes in San Diego purported to be used as daycare facilities.
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Federal prosecutors say the defendants secured California licenses to operate home daycare facilities specifically for low-income families that they never intended to operate.
The defendants registered their licenses with local organizations like Child Development Associates (CDA) and the YMCA, then submitted falsified attendance records to claim government subsidies intended for low-income families.
Overall, prosecutors say defendants each profited anywhere from $538,000 to $1.2 million from the fraud scheme, according to Breitbart.
Prosecutors say the defendants face severe federal charges, primarily focusing on wire fraud, which carries a maximum penalty of up to 20 years in prison, and several individuals may also face charges of money laundering.
The investigation, which was labeled Operation Cradle to Grift, was heavily supported by the Internal Revenue Service’s (IRS) Criminal Investigation Division, which targets complex white-collar crimes, according to The California Globe.
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