Four Charged in Multi-Million-Dollar Childcare Benefits Fraud Ring that Bilked California Welfare and Benefits Program for Years

NEWS RELEASE SUMMARY – May 2, 2023

SAN DIEGO – Four San Diego residents were charged in federal court today with participating in a childcare-benefits fraud scheme that bilked a California welfare and benefits program of millions of dollars.

Mohamed Muriidi Mohamed, Amina Abdirazak Omar, Osob Abdirazak Omar and Omar Omar were arraigned this afternoon before U.S. Magistrate Judge Barbara L. Major.

According to the indictment, the Department of Health and Human Services (HHS) funds a program known as “Alternative Payment Program/Stage 2 Childcare.”  This childcare benefits program allows eligible parents to select a licensed childcare provider to provide childcare services that best fit a family’s needs.  In San Diego, this program is administered by two contractors: Child Development Associates (CDA) and the Young Men’s Christian Association (YMCA).  CDA and YMCA disburse the funding from HHS and the state of California directly to the designated childcare providers. In administering the program, CDA and YMCA require verification forms to be completed by the parent, and the employer and/or school.

The indictment alleges that the defendants fraudulently caused CDA and YMCA to pay out millions in childcare benefit program funds by falsely verifying that parents were working at or attending school at the UMI Learning Center, a vocational and language school located on University Avenue, although the parents were not actually participating in classes or employment during the days, and for the hours, claimed.  In turn, childcare providers submitted false daily childcare attendance forms claiming that childcare was provided for days and hours when the parents were supposedly at UMI Learning Center for work or school, although no childcare was actually provided.  In exchange for these false verification forms, parents were expected to pay $200 to UMI Learning Center, and the childcare providers were expected to split the childcare benefit program funds they received, 50/50, with the parents.  The indictment alleges that the defendants’ scheme caused CDA and YMCA to pay out over $3.7 million dollars in childcare benefit program funds.

“Childcare benefit programs are designed to help parents who need the assistance of quality childcare service,” said U.S. Attorney Randy Grossman. “Fraud takes money away from the very communities those programs are intended to serve.” Grossman thanked the prosecution team and Homeland Security Investigations for their hard work on this case.

“It is unacceptable for individuals to exploit and defraud programs designed to provide basic childcare benefits for hard working families,” said Chad Plantz, special agent in charge, HSI San Diego. “This investigation serves as an example of how dedicated we are to working in coordination with our law enforcement partners to support and affect a positive impact on the local community.”

DEFENDANTS                                             Case Number 23CR0552-RBM                                   

Mohamed Muriidi Mohamed, Spring Valley                           Age: 46

Amina Abdirazak Omar, Spring Valley                                   Age: 40

Osob Abdirazak Omar, San Diego                                         Age: 32

Omar Omar, San Diego                                                          Age: 22

SUMMARY OF CHARGES

Wire Fraud and Theft Conspiracy - Title 18, U.S.C., Section 371

Maximum penalty: Five years in prison and fine of the greater of $250,000, or twice the pecuniary gain or loss

Wire Fraud– Title 18, U.S.C., Section 1343

Maximum penalty: Twenty years in prison and fine of the greater of $250,000, or twice the pecuniary gain or loss

Theft of Government Funds – Title 18, U.S.C., Section 641

Maximum penalty: Ten years in prison and fine of the greater of $250,000, or twice the pecuniary gain or loss

AGENCIES

U.S. Department of Homeland Security, Homeland Security Investigations

U.S. Department of Health and Human Services, Office of the Inspector General

U.S. Department of Housing and Urban Development, Office of the Inspector General

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.