MINNEAPOLIS (KMSP) - Three Minneapolis child care centers have now pleaded guilty to fraudulent billing of the state’s taxpayer supported Child Care Assistance Program, Hennepin County Attorney Mike Freeman announced Wednesday.
On Tuesday, Ummah Child Care Services pleaded guilty to theft by swindle. Children’s Choice Center and Minnesota Child Care Service pleaded guilty in October and November, respectively.
The investigation into the fraud began in 2013 when state officials noticed unusually large billings from Minnesota Child Care Service to the Child Care Assistance Program. The 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.
In September 2015, 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 one of the owners found they were claiming many more children were attending the childcare centers than were actually present. The centers were overbilling the state’s Child Care Assistance Program, then writing checks to themselves and family members and providing kickbacks to some parents.
Ummah Child Care Services, Inc., located at 2505 Fifth Ave. S in Minneapolis, was fined $10,000 and ordered to pay $13,700 in restitution to the state’s Child Care Assistance Program.
Children’s Choice Center, located at 2700 Summer St. NE agreed to a $10,000 fine and $28,267 in restitution and Minnesota Child Care Service, located at 2500 Minnehaha Ave., agreed to a $50,000 fine and $103,000 in restitution.
As part of the settlement, the billers for all three centers agreed to sign disqualification agreements barring them from working with state-licensed child care providers for two years. In return, the Hennepin County Attorney’s office agreed not to charge them criminally.
Charges against two of the executives of the Minnesota Child Care Center were also dismissed as part of the settlement.