MINNEAPOLIS (KMSP) - The owner and the assistant director of a Minneapolis child care center have been charged with felony theft-by-swindle for allegedly defrauding the state out of $103,500. Abdirazik Gayre, 51, and Ibrahim Osman, 53, were the owner and director of Minnesota Child Care Services.
In September, search warrants were executed at Minnesota Child Care Services, Children’s Choice Center and Ummah Child Care Center. The searches of the child care centers and probe of bank accounts controlled by Gayre found they were overbilling the state’s Child Care Assistance Program, then writing checks to themselves and family members and providing kickbacks to some parents.
Minnesota’s Child Care Assistance Program is designed to provide low-income families with subsidies for free or reduced-cost child care, allowing parents to work or get an education. The program is funded by state and federal taxes.
How it happened
Parents of enrolled children are required to sign-in and sign-out at the beginning and end of the day. Those attendance records are used to create the billing records to the state for payment for the child. Investigators compared the attendance sheets at Minnesota Child Care Services with the billing statements, and reviewed video from a hidden camera recording everyone who went into the building from Dec. 2014 to May 2015. The review found Gayre and Osman charged at least 7 percent more children than were in attendance -- a total of 1,673 children.
According to the charges, Gayre wrote checks to himself, to his wife and to Osman totaling $386,000 from July 2014 to September 2015. Those checks were cashed and some of the cash was given to parents of enrolled children. The criminal complaint alleges the kickbacks were hush money, so that parents wouldn’t tell the state about the fraudulent billing when their children were not in attendance.
Court appearances for Gayre and Osman have not been set. The cases against Minnesota Child Care Services as a business is set to go to trial on June 6.