$111K Settlement in Childcare Fraud Case

Alameda County District Attorney Nancy E. O'Malley announced that today her Office will deliver a settlement of $111,389.62 in restitution to the California Department of Education. The restitution is the result of a criminal prosecution of child care fraud filed by the Alameda County District Attorney's Office in July of 2012, and settled by way of negotiated disposition on January 7, 2012. This settlement represents the largest single child care fraud restitution order in Alameda County history.

Factual Background

Between October of 2002 and September of 2011, Khadijah Ali intentionally defrauded 4Cs of Alameda County, a non profit agency that distributes money provided by the California Department of Education for child care for parents that meet specific needs-based requirements in order to obtain government subsidized child care for their three children. Despite being a full-time employee of the San Francisco Unified School District, Ali claimed that she was a homeless single mother who received no assistance from her children’s father.

However Ms. Ali was neither single, homeless, nor financially destitute. She was then and remains to this day married to her husband Malik Ali, who was gainfully employed as a full-time civilian employee of the Alameda County Sheriff’s Department. The two lived with their three children in a house they had purchased together in 2005 in the city of Alameda. Their children enjoyed the benefits of both parents’ incomes (which were above the threshold to qualify for child care assistance) as well as medical and dental insurance through their father’s job.

Ms. Ali concealed or lied about these facts every year for nine consecutive years, thereby defrauding Alameda County of a total of $185,302.60 in grant money designated for children in need.

The fraud was detected by an employee of 4Cs and reported to the DA's Office. Following an investigation by the Public Assistance Fraud Division of the Alameda County District Attorney’s Office, Khadijah and Malik Ali were charged with several felonies, including conspiracy to commit fraud and grand theft. Pursuant to a negotiated settlement she has paid a total of $111,389.70 (moneys obtained primarily from the sale of their home in Alameda) to the California Department of Education. Khadijah Ali pleaded guilty to felony grand theft and was placed on five years of probation. Criminal charges against Malik Ali were dismissed.

“Investing in early childhood development confers advantages on children that are as well-documented as they are profound,” said Alameda County District Attorney Nancy E. O’Malley. “The Department of Education provides funds to ensure that these tremendous benefits can be made available to children from families that are struggling financially. Because funding for these programs is limited, applicants who falsify their need are stealing money set aside for the legitimately needy. My Office will remain diligent in working with our partners in Alameda County to investigate and prosecute cases involving child care fraud.”

State Superintendent of Public Instruction Tom Torlakson states “The California Department of Education strives to provide access to quality early care and education programs for California’s most vulnerable children and families. Over the past several years our child care and development funds have been drastically cut, impacting low income families’ access to quality programs. I would like to thank Alameda County’s District Attorney’s Office for their efforts to preserve our limited resources. Department of Education child care and development contractors, such as 4Cs of Alameda County, should be recognized for their ongoing efforts to safeguard public funding."

Posted on Jan 11, 2013