FOX 9's day care fraud investigation leads to creation of MN DHS fraud department [Feb. 28, 2013]

FOX 9 Minneapolis-St. Paul’s investigation examined alleged fraud within Minnesota’s child care assistance program, which distributes over $400 million annually to help low-income families access childcare. The station’s three-month probe focused on Deco Child Care Centers, with locations in Minneapolis, St. Paul, and Apple Valley.

According to FOX 9 Minneapolis-St. Paul, company insiders alleged that Deco was actively recruiting women eligible for government childcare assistance and offering them employment at the centers. The video claims that only a small percentage of these hired mothers performed actual work, yet Deco allegedly continued billing the government for childcare services. FOX 9 Minneapolis-St. Paul reports that sources described instances where mothers would sign their children and themselves in, then leave to run errands like grocery shopping while the company billed the state.

FOX 9 Minneapolis-St. Paul alleges that Deco’s compensation structure incentivized enrollment fraud: the more children a woman had enrolled, the more the company allegedly paid her per hour, despite identical job titles. The station reports that Deco was eligible to receive nearly $100,000 in public funds every two weeks.

According to FOX 9 Minneapolis-St. Paul, Deco’s owner Yasmin Ali became the focus of a criminal investigation, with government agents raiding the company’s offices and seizing computers and records. While the Minnesota Department of Human Services Commissioner declined to discuss the Deco case specifically, FOX 9 Minneapolis-St. Paul reports that she publicly promoted creating a dedicated child care fraud unit within DHS.

The investigation’s impact extended beyond the individual case. FOX 9 Minneapolis-St. Paul notes that Minnesota’s Department of Human Services lacked its own fraud investigation unit despite overseeing a $400 million program. In response to the station’s reporting, Governor Dayton allegedly sought $300,000 in legislative funding to hire six fraud investigators, with the new unit potentially operational by the end of 2013.

The broader implications underscore why this investigation matters: FOX 9 Minneapolis-St. Paul emphasizes that every dollar lost to fraud represents resources diverted from families legitimately seeking childcare assistance. The creation of a dedicated fraud unit represents an institutional response to vulnerabilities exposed by the station’s reporting.

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

“We’ve got to be more aggressive in investigating fraud. Hard to believe, but right now Minnesota’s Department of Human Services doesn’t have its own fraud unit to investigate daycare providers scamming the system.”

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

“Any dollar that’s lost to fraud is a dollar that’s taken away from poor children, it’s literally stealing from the mouths of children.”