Childcare fraud cases have become the norm in Minnesota. There, experts estimate social services fraud cost some $9 billion and a large part of that is childcare fraud.
There, people set up corporations, claim to run a childcare facility and send bills for millions of dollars to various government-funded programs for meals and services.
Only there were no children, no facilities, no services and no meals. Dozens of prosecutions have resulted in dozens of convictions.
Then the fraud was found in other locations, and Congress responded with proposals to crack down, and now it’s in San Diego.
The Department of Homeland Security confirmed, “Fraudsters FOILED in San Diego. A dozen individuals were arrested for their role in a multi-million-dollar childcare fraud scheme. The patriots @HSI_HQ are hard at work with our @WHFraudTF partners in stopping this flagrant theft of taxpayer dollars.”
Fraudsters FOILED in San Diego.
A dozen individuals were arrested for their role in a multi-million-dollar childcare fraud scheme.
The patriots @HSI_HQ are hard at work with our @WHFraudTF partners in stopping this flagrant theft of taxpayer dollars. pic.twitter.com/bS8lMQSIKG
— Homeland Security (@DHSgov) September 16, 2026
Breaking: Twelve people just got charged in San Diego for siphoning more than $10 million meant to help low-income families pay for childcare. Over 250 federal, state, and local officers hit 12 homes early Thursday.
DOJ says they are naturalized U.S. citizens and lawful… pic.twitter.com/lA5wuf4821
— Kim “Katie” USA (@KimKatieUSA) September 15, 2026
A report at KFMB said 12 people were arrested in the $10 million scheme across San Diego County.
The arrests were called, “Operation Cradle to Grift.”
The report said Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division from the DOJ said it involved “12 ghost daycares.”
“According to the allegations, these were made up, fake daycares, that day after day month after month year after year billed the taxpayer for allegedly taking care of children, but there were no children, there were no daycares. These daycares were fake and the taxpayers were paying for all of it,” said McDonald.
The money actually was intended for low-income families seeking childcare help.
The report said the defendants were licensed to run home daycares and registered with Child Development Associates or the YMCA to provide subsidized childcare.
They handed in attendance records showing the number of children for which they claimed to have cared, and were paid.
Authorities suggest the defendants face charges of wire fraud and or money laundering.
