Where are the kids? San Diego officials demand answers after $10 million ‘ghost daycare’ sweep

# What happened Last week more than 250 federal, state and local officers carried out coordinated raids across San Diego County. Authorities arrested 12 people and searched roughly a dozen homes that had been operating as daycares. When the Justice Department unsealed the charges, prosecutors said these were "ghost daycares" that collected more than $10 million in childcare subsidies for children who were never there.

# Why taxpayers and families are affected

# How the alleged fraud reportedly worked Prosecutors allege each operator brought in between $538,000 and $1.2 million. Some operators are accused of submitting attendance sheets while they were out of the country. Independent reporting noted investigators and a journalist visiting home daycares, asking "where are the kids?" and documenting empty operations.

# Patterns the County sees Desmond points to a pattern across different programs: money flows out, oversight is weak, and problems continue even after audits raise red flags. He cites a prior case where the County's District Attorney charged the former COO of a nonprofit with taking more than $130,000 meant to prevent fentanyl deaths. A 2023 audit had flagged concerns for that nonprofit, yet the County signed a second contract.

# What County officials are asking for now Desmond asks for stronger, practical accountability measures:

• Audits that follow the dollars and show up unannounced.
• Verification that compares paperwork to on-the-ground reality before payments proceed.
• Immediate hold on further payments when an audit reveals red flags until those concerns are resolved.

Desmond has asked the County Chief Administrative Officer for a full accounting of how attendance is verified before payments and what procedural changes will prevent recurrence.

# Who else is involved Associates and the YMCA. Federal prosecutors say their investigation continues.

# What the public can do Desmond urges people who see suspicious activity to report it. The HHS Inspector General hotline is 1-800-HHS-TIPS (1-800-447-8477). He also provided his office contact: 619-531-5555 and jim.desmond@sdcounty.ca.gov.

# Bottom line The unsealed charges allege a multi-million-dollar scheme that deprived eligible families of subsidy dollars and childcare slots. County leaders want audits that include surprise checks, stronger prepayment verification, and clear consequences when paperwork and reality don't match. The federal investigation is ongoing and the defendants will have their day in court.