MN legislative auditor to probe day care fraud allegations

Jim Nobles
Legislative auditor Jim Nobles testified before a House committee Tuesday, March 10, 2015.
Mark Zdechlik | MPR News 2015

Updated: 7:43 p.m. | Posted: 12:44 p.m.

Minnesota's legislative auditor is opening an investigation into the scale of day care fraud in Minnesota.

News reports from Fox 9, citing unnamed government sources, suggested that up to $100 million in childcare subsidies was being illegally pocketed by operators of daycare providers who were overbilling the state — a level of fraud far beyond what state officials have acknowledged.

The station also reported about $100 million has left Minneapolis-St. Paul International Airport in carry-on luggage, going to places like the Middle East and Somalia.

The TV station reported some of the money was making its way into parts of Somalia where the terror group al-Shabab was likely taking a cut.

Minnesota's acting Human Services commissioner, however, has said there was nothing found in similar, past day care fraud cases to indicate ties to terrorism and that the $100 million figure was not "credible."

"My office obviously has no role in determining whether the money is being used with terrorism or not. That'll be a role for other criminal investigative organizations," Legislative Auditor Jim Nobles said Friday. "But the allegation that public funds are being fraudulently obtained is definitely my responsibility to look into."

Department of Human Services Acting Commissioner Chuck Johnson said in a statement Friday that his department will work with the legislative auditor's office.

"We thank the [Office of the Legislative Auditor] for joining us in our years-long effort to combat fraud in the Child Care Assistance Program, to ensure that every dollar is used for the better care of our kids," Johnson said.

Johnson said they have been aggressive in attempts to pursue fraud since forming a child care fraud unit in 2014, and credits the unit and efforts by the department for, "the closure of 13 child care centers, six felony convictions and court orders for more than $4.6 million in restitution."

The department currently has 10 open investigations into allegations of fraud within the child care assistance program.