The child care business appears to be booming in Hennepin County, but 30 percent increase in assistance over last year has fraud investigators looking into whether swindlers are cashing in.
The number of centers that are licensed to serve families receiving government help with their child care services climbed from 42 to 55 over the last year, but is the need that great?
Minnesota hands out $200 million annually to help poor families with child care expenses, but fraud investigators estimate nearly $20 million or more is going right into the pockets of organized crooks.
The FOX 9 Investigators first exposed an investigation into the Deqo Family Centers in the metro a few weeks ago, but another center is now under investigation as well.
"It's so hard to get a grasp on because centers are opening and closing so rapidly," said Judy Grandel, Hennepin County fraud supervisor.
In late September, Chicago Childcare Center began billing Hennepin County for watching children from low-income families. By February, officials say the business had collected over $100,000 in assistance funds. Two weeks later, fraud investigators raided the site after county investigators began to suspect the child care center was cooking the books in order to collect more public money.
According to a search warrant obtained by FOX 9, agents were conducting surveillance. They watched as 16 children entered the building, but they claim the county was later billed to pay for 35.
On another day, 14 children showed up, but the day care bill was for 31 children.
The owners of Chicago Child Care wouldn't speak on camera, but one of them -- Mohamed Ibrahim -- told FOX 9 he's done nothing wrong.
Regulators are struggling to keep up with day care fraud, and the state currently has no investigators dedicated to tracking it. Hennepin County, which pays out about $9 million in child care funds each month, has half the fraud staff it did three years ago.
"I don't know how we're going to get it all done," Grandel admitted.
The investigations are resource-intensive, requiring surveillance and combing through lots of paperwork -- and informants who spoke with FOX 9 say those looking to game the system know that regulators are strapped.
"They know after 5 o'clock, no one's showing up," one informant said. "No one's coming on the weekends."
The child care centers are still under investigation for fraud, but no charges have been filed so far.
