It was an apparent family affair, according to Pacheco, because most of the suspects were from the same family.
Two of the accused worked for Riverside County, and one of the county workers, allegedly got her mother, stepmother, father and her sister-in-law involved.
Officials said Stephanie Luna Vega is the ring leader in the scheme. She was in charge of dispersing taxpayer money to needy families for child-care services.
Vega is accused of setting up a number of fake children and fake families and collecting the money for herself.
Pacheco said the suspects defrauded taxpayers to the tune of $527,000, and the unfortunate part was just how easy the whole thing was. All they had to do was fill out the paperwork with fake names, and the checks started flowing.
"Needy families needed child care and had to get on a list because there are only so many financial resources to provide those child-care services," Pacheco said. "They, in essence, stole the money not only from the taxpayers, but prevented those families from getting child-care services."
Five of the seven suspects were arrested on Thursday. The other two suspects are out of state, but police said they have been told as soon as they get back to California, they need to turn themselves in.
If they are convicted, they can face anywhere from five to seven years in prison each.