Fraud investigator: Wasted taxpayer dollars going to day cares [Feb. 24, 2015]

FOX 9 Minneapolis-St. Paul reports on alleged widespread fraud involving daycare centers in Minnesota that the station claims have been collecting millions in public subsidies while allegedly providing bogus child care services to low-income families.

According to FOX 9 Minneapolis-St. Paul, Steve Heliki, who spent 15 years as a welfare fraud investigator for Hennepin County, came forward after being fired in 2013 while investigating what he characterizes as a systematic scheme. The county allegedly terminated Heliki citing insubordination and problematic tactics, but Heliki claims the termination was retaliation for uncovering fraud that county officials allegedly wanted to conceal.

FOX 9 Minneapolis-St. Paul reports that Heliki identified multiple daycare centers in Hennepin County allegedly billing over $100,000 per month in public subsidies. The station’s investigation found that several of these centers operated from unmarked buildings with no signage indicating they were daycare facilities. When FOX 9 Minneapolis-St. Paul and Heliki visited these locations during posted business hours, no one answered the doors, despite the centers being licensed by the state and eligible to collect child care subsidies.

According to FOX 9 Minneapolis-St. Paul, Heliki documented evidence that one center allegedly charged the county for children who were never dropped off at the facility. The station also notes that all centers visited had their windows mysteriously covered or blacked out. FOX 9 Minneapolis-St. Paul claims Heliki explained this prevented verification of when the facilities were actually operating, suggesting centers could bill for hours when staff had allegedly left early.

FOX 9 Minneapolis-St. Paul reports that state inspection records showed all the centers on Heliki’s tour had been cited for licensing violations flagged by the Department of Human Services. The station notes that in the two years since Heliki’s firing, Hennepin County had not prosecuted a single daycare fraud case. FOX 9 Minneapolis-St. Paul also reports that Ramsay County did charge a daycare operator with fraud in December following the station’s earlier reporting.

FOX 9 Minneapolis-St. Paul includes county officials’ responses, with Hennepin County stating it takes alleged daycare fraud seriously and investigates when actual fraud occurs. The station reports that most metro counties have handed daycare fraud investigations to a special state Department of Human Services team that had launched over a year prior and allegedly had nearly a dozen active investigations underway.

According to FOX 9 Minneapolis-St. Paul, Heliki appealed his termination but an arbitrator upheld the county’s decision to fire him. Heliki went public alleging this was a deliberate attempt by county officials to deceive taxpayers and conceal fraud, though county officials deny intentionally trying to deceive the public.

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

“They don’t want a fraud unit to do anything. They want a fraud unit on paper.”

“Each of the centers he took us to had their windows mysteriously covered… So you can’t prove when they’re working and when they’re not.”

“This is a cover up. This is a deliberate attempt by officials in Hennepin County to deceive the taxpayers.”

This reporting matters because it raises questions about oversight of child care subsidy programs designed to serve low-income families and the adequacy of fraud investigation resources at county and state levels.