A city employee and her partner have been arrested and charged with orchestrating an elaborate welfare scam, falsely claiming to care for 17 children in order to secure hundreds of thousands in public benefits.
Daisy Avalos, 47, a city worker with the San Francisco Municipal Transportation Agency (SFMTA), and her partner, 49-year-old Maggie Pasigan, pleaded not guilty to charges of grand theft, welfare fraud, money laundering, and conspiracy on Thursday. Investigative authorities allege that the pair defrauded Section 8 housing assistance and child care subsidy programs out of more than half a million dollars, said District Attorney Brooke Jenkins in a public statement, according to the SF Standard.
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The scheme unraveled after the San Francisco Human Services Agency began investigating Pasigan's eligibility for welfare benefits in 2023. Investigators discovered that Pasigan had left undisclosed her domestic partnership with Avalos, as well as Avalos' monthly income as a government employee, both of which would have disqualified their household from receiving low-income public support, as noted by the SF Chronicle.
Suspicion intensified when surveillance operations found no evidence supporting the existence of the alleged 17 children. Prosecutors described Pasigan and Avalos as receiving over $30,000 per month in child care subsidies purportedly intended to support these fictional dependents. Months of surveillance of the couple's Sunset District residence, located on 37th Avenue near Taraval Street, showed no presence of children, no drop-offs or pickups, and no typical indicators of a childcare operation, district attorney sources reported per the SF Standard.
Public records indicate further irregularities. Pasigan reportedly owned two San Francisco businesses—a daycare called Magpie’s Daycare at 431 Page St., and a boutique named Legends Mama Boutique at 70 Bayview St. Both locations appeared in public documents as former residential addresses associated with the couple; however, neither business had active online listings, prompting further investigative scrutiny.
The San Francisco Police Department, Sheriff's Office, San Francisco Housing Authority, and the U.S. Department of Housing and Urban Development Office of Inspector General participated in the investigation. Special Agent Robert Lawler from HUD emphasized the significance of the fraud: "The defendants' fraudulent actions diverted over $375,000 in taxpayer funds from multiple federal programs, including HUD-assisted housing programs designed to provide safe and affordable housing for low-income families," he stated according to the SF Standard.
Avalos' employer, the San Francisco Municipal Transportation Agency, declined to comment on active investigations or personnel matters, with spokesperson Michael Roccaforte stating, "We do not comment on pending investigations or personnel matters," as quoted by the SF Standard.
This concerning pattern—public employees defrauding governmental aid programs—echoes a recent case in New York City. In that separate investigation, reported by the New York Times, multiple city workers were indicted for criminal conspiracies involving identity theft from vulnerable populations like the homeless, fraudulent pandemic relief applications, and even illegal firearm manufacturing. Manhattan District Attorney Alvin Bragg highlighted the troubling link seen increasingly between public sector employees and complex fraud schemes, underscoring that such misconduct strikes at the integrity of government systems and erodes public trust.
District Attorney Brooke Jenkins made her stance clear about safeguarding San Francisco's public funds, pledging that her office will vigorously prosecute those seeking to exploit the city's welfare programs. "My office will take action to ensure the integrity of our benefits systems and seek to hold those accountable who would defraud the system for their own personal gain," Jenkins stated per the SF Chronicle.
Avalos and Pasigan are expected back in court on April 22, where a judge will set the date for their preliminary hearing.
