3-month investigation exposes day care center fraud in the millions [Feb. 27, 2013]

FOX 9 Minneapolis-St. Paul’s investigative team spent three months examining operations at Deco Family Centers, a Minneapolis-based child care provider, after receiving an anonymous tip. The video documents what FOX 9 Minneapolis-St. Paul alleges is a scheme to defraud Minnesota’s child care assistance program by misusing taxpayer dollars on a massive scale.

According to FOX 9 Minneapolis-St. Paul, Deco Family Centers, owned by Yasmin Ali, allegedly recruited women who qualified for county-funded child care assistance and offered them jobs at the centers—many to supervise their own children. The video features interviews with four current and former Deco employees, two of whom agreed to speak on camera. These sources allege that Deco billed the county for child care while these mothers were supposedly working, though employees claim most did little to no actual work.

FOX 9 Minneapolis-St. Paul reports that insiders alleged only about 2% of hired mothers performed legitimate work duties. According to the video’s sources, some women would simply sign themselves and their children in, then leave to run errands like grocery shopping. FOX 9 Minneapolis-St. Paul also alleges that Deco structured compensation so that mothers earned more per hour based on how many children they enrolled, creating financial incentives to recruit women with larger families.

Government records cited in the video show that Deco’s Minneapolis and St. Paul centers were each eligible to receive nearly $50,000 in child care assistance funds every two weeks—totaling over $2 million annually. FOX 9 Minneapolis-St. Paul claims that employees provided inflated timesheets to the county, allowing Deco to bill for maximum child care hours the mothers did not actually work.

The video also documents state inspection reports obtained by FOX 9 Minneapolis-St. Paul showing previous citations against Deco for failing to maintain accurate records of staff work hours and for not conducting required background checks or documenting safety training completion. One employee alleges to FOX 9 Minneapolis-St. Paul that they witnessed falsified documentation claiming staff had received mandatory training when they had not.

FOX 9 Minneapolis-St. Paul reports that Deco received additional public funding beyond child care assistance. The Minneapolis center allegedly received nearly $90,000 for meals in its first year of operation through a catering contract signed by Adarus Ali, Yasmin Ali’s brother. The video notes that Adarus Ali pleaded guilty to perjury in 2009 for lying to a federal grand jury about knowledge of Somali men being recruited to fight in Somalia.

During the investigation, law enforcement conducted coordinated raids on Deco’s Minneapolis, St. Paul, and Apple Valley locations, seizing computers and documents. FOX 9 Minneapolis-St. Paul reports that the raid involved the FBI, the State Bureau of Criminal Apprehension, and the Ramsey County Attorney’s Fraud Unit. The state subsequently rejected Deco’s proposal to expand catering services, allegedly citing costs double the normal rate and incomplete documentation. As of the video’s broadcast, no charges had been filed, and the Ramsey County Attorney’s Office declined to discuss the ongoing investigation.

In FOX 9 Minneapolis-St. Paul’s Own Words

“Sometimes they would come in, sign their children in, sign themselves in, and go grocery shopping.”

“Only about 2% of hired mothers did some kind of work.”

“Her value was in how many children she had.”