The US government has terminated a detained undocumented immigrant’s “dreamer” status, alleging that he is a gang member in part because of a tattoo on his arm that says “peace” in Spanish.

Daniel Ramirez Medina, a 23-year-old with no criminal record who was brought to the US from Mexico when he was seven years old, was arrested last Friday in Seattle despite the fact that he was twice granted a work permit under the Deferred Action for Childhood Arrivals (Daca) program.

The incident is believed to be the first arrest of a “dreamer”, as Daca recipients are known, since Donald Trump’s inauguration. The government’s court filings on Thursday have raised fresh concerns about the methods Immigration and Customs Enforcement (Ice) may be using to deport immigrants who were previously protected by Barack Obama’s policies.

The filing came hours before Trump offered a vague response about the future of the program at a press conference, saying: “The Daca situation is a very, very difficult thing for me, because I love these kids … You have these incredible kids in many cases, not in all cases. In some of the cases, they’re having Daca and they’re gang members and they’re drug dealers.”

Daca protects roughly 750,000 people who were brought to the US as children and granted temporary work permits. But Jeffrey Robins of the US justice department wrote in federal court documents that the homeland security department “automatically terminated” Ramirez’s status when Ice arrested him and launched “immigration removal proceedings”.

Ramirez was taken into custody at his father’s house, when officers showed up on an arrest warrant for his father. Although law enforcement had no warrant for Ramirez, who was asleep when officers arrived, the agents asked him “are you legally here?” and eventually detained him, according to a lawsuit Ramirez’s attorneys filed challenging his ongoing detention.

Robins said officers asked Ramirez about a “gang tattoo” on his forearm, and that Ramirez responded that he “used to hang out with the Sureno’s in California” but “fled California to escape from the gangs”.

The brief did not provide details of the tattoo, but Mark Rosenbaum, one of Ramirez’s attorneys, said the tattoo says “La Paz BCS”, which means peace in Spanish and is also the capital of Baja California Sur in Mexico where he was born.

Ice called Ramirez an “admitted alien gang member” in a press release this week, and the justice department filing on Thursday claimed that he confessed that he still hangs out with gang members.

Rosenbaum strongly rejected the allegation in a statement, saying: “This is false. Mr Ramirez did not say these things because they are not true. And while utterly implausible and wholly fabricated, these claims still would not be sufficient evidence that Mr Ramirez is a threat to the public safety or national security.”

A group of undocumented or Daca-protected immigrants holds a press conference in front of a Trump building in Washington. Photograph: Justin Lane/EPA

The tattoo is not evidence of gang activity, Rosenbaum added: “Even though [Ramirez]’s counsel invited the government to supply any corroborating evidence to support their outrageous claims of gang membership or activity beyond this supposed confession, they have failed to do so in this brief.”

The use of a tattoo as evidence and the government’s immediate termination of his Daca status have both raised serious alarms among immigration activists that Trump’s government may broadly target dreamers. That’s despite the fact that the president has suggested he wouldn’t go after this population, recently saying Daca recipients “shouldn’t be very worried”.

David Leopold, a leading immigration lawyer, noted that nothing has changed since Ramirez twice passed extensive background checks and had his Daca status approved.

“It’s shocking, especially when you have a situation like this where this young man has been vetted again and again,” he said. “This is another example of the Trump deportation force changing the rules in the middle of the game … He got into a social contract with the government. He kept his word. They need to keep their word.”

Alan Schlosser, senior counsel with the ACLU in northern California, said there was a long history of law enforcement alleging gang activity with flimsy or non-existent evidence.

“It’s a huge problem in low-income, Latino and African American neighborhoods,” he said, noting that police have frequently used clothing or tattoos as grounds for gang affiliation or have twisted comments to police to be confessions. “It’s based on neighborhood, skin color and prejudice.”

Department of Homeland Security (DHS) and Ice spokespeople did not respond to requests for comment on Thursday.

In a statement earlier in the week, DHS claimed that since the start of Daca in 2012, roughly 1,500 recipients have had their deferred action terminated due to a criminal conviction or gang affiliation.

“This case illustrates the work Ice fugitive operations teams perform every day across the country to remove public safety threats from our communities when they encounter them.”