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00:06:32.680Fraud is something we focus on often on this show,
00:06:35.220And it seems that we keep finding a lot more of it this time, even more shocking.
00:06:39.740And yet again, coming out of, yeah, California, the Justice Department has announced that
00:06:45.48012 individuals have now been charged in Southern California.
00:06:48.900And what they're describing is an alleged home daycare, massive fraud scheme involving
00:06:55.100more than 10 million in taxpayer funded child care money.
00:06:59.920And wait until you hear how prosecutors say this actually worked.
00:07:03.380The money was supposed to help, quote, low-income families pay for child care.
00:07:09.300Instead, the federal prosecutors now allege that millions of dollars were funneled to bogus or fraudulent daycare operations
00:07:17.560that were claiming taxpayer money for child care they allegedly were not actually providing.
00:07:24.500Sound familiar? It's awful close to what we found in Minnesota.
00:07:29.200Now, this wasn't a tiny investigation either.
00:07:32.260According to the U.S. Attorney's Office for the Southern District of California, more than 250 federal, state, and local law enforcement personnel participated in the coordinated takedown.
00:07:45.100They said that all 12 defendants were arrested and authorities executed search warrants at 12 different San Diego area homes that claimed to be operating as child daycare facilities.
00:07:58.720Now, the details in the federal complaint are extraordinary as well.
00:08:03.480Prosecutors say the system, well, this is how it worked.
00:08:06.260The defendants obtained California licenses to operate home child care facilities.
00:08:11.300They then registered with organizations administering subsidized child care for eligible families.
00:08:19.500In essence, this is another form of welfare.
00:08:22.320Now, to get paid, daycare providers were required to submit attendance records
00:08:26.420documenting which children were actually being cared for along with the dates and times that
00:08:32.040they were there. It's pretty straightforward. You take care of a child, you document it,
00:08:37.480the government reimburses you, and that's how the system works. But prosecutors allege these
00:08:43.620defendants submitted false attendance records claiming children were receiving daycare when
00:08:49.520they weren't. And investigators apparently decided to test those claims against reality.
00:08:55.140They conducted surveillance. One defendant allegedly claimed he cared for 23 children in March of 2026 and 25 children in April and that he provided child care every single day during those two months.
00:09:11.220Federal investigators say surveillance covered 57 days during that period.
00:09:16.740And guess how many days they allegedly saw children entering or leaving the facility?
00:09:28.940According to the federal complaint, that one day happened to be a day a state inspector arrived for an unannounced inspection.
00:09:38.300Prosecutors say the children and even the daycare operator himself showed up after the inspector arrived.
00:09:45.860That's what federal prosecutors are alleging.
00:09:48.820Now, what's crazy is the story gets even, well, more insane from here
00:09:52.760because investigators compared some daycare attendants' claims against border crossing records.
00:09:58.700One defendant allegedly left the United States around January the 1st of 2024
00:10:03.700and didn't return until around January the 30th.
00:10:08.020So that would be 30 days they're out of the country.
00:10:10.620Yet according to the prosecutors, attendance records were still submitted claiming
00:10:15.320childcare was being provided at the home during January
00:10:19.220when the person who was supposed to be watching the children was literally out of the country.
00:10:24.540Now the government also says eight subsequent direct deposits total nearly $15,000.
00:10:32.280Federal investigators say each of the 12 defendants received somewhere between approximately $538,000 and $1.2 million over varying periods.
00:10:44.940Now, several allegedly collected more than $1 million each.
00:10:48.840Altogether, prosecutors say more than $10 million intended to help low-income families was diverted through these alleged schemes.
00:10:56.740Now, the defendants are facing wire fraud charges, with some also charged with money laundering.
00:11:03.420These, again, are all the allegations.
00:11:06.260And of course, the defendants are going to say, oh, no, no, no, we're all innocent.
00:11:11.120Now, this wasn't the only thing that the Trump administration announced this past week.
00:11:15.480The Justice Department and Small Business Administration also announced the results of a nationwide enforcement surge
00:11:21.760that was targeting fraud involving pandemic-era government loans.
00:11:26.740Remember, there was a lot of people taking a lot of cash during the pandemic, and it was a free-for-all to get money.
00:11:32.720Well, now we know that between June 12th and September 1, prosecutors say enforcement actions involved more than 160 criminal defendants and more than $245 million in intended taxpayer losses.
00:11:49.660Roughly 80 defendants were newly charged.