Day Care Scam Uncovered in Minnesota
In Minnesota, a long-running scandal involving taxpayer-funded day care has come to light, with roots tracing back to at least 2014. Scammers reportedly loaded carry-on bags, each containing as much as $1 million, to smuggle cash out of the country.
Over the past decade, the trend has skyrocketed at the Minneapolis-St. Paul International Airport. In 2016 alone, travelers took out $84 million, and the figure climbed to $100 million the next year, as reported by local media outlets.
This unsettling situation has escalated dramatically, especially as federal authorities claim a massive fraud scheme is behind it—estimated to be worth up to $9 billion. Allegedly, fake daycares and businesses fraudulently obtained millions in government funds by falsely claiming to provide essential services.
Earlier reports suggested that some of the money transported via airport luggage, primarily heading to the Middle East and Somalia, might have connections to child care fraud in Minnesota. This was just beginning to surface back then.
Travelers are allowed to carry up to $1 million in their bags, provided they complete the appropriate forms.
Surveillance footage linked to a state fraud case revealed parents arriving at day care centers with their children and leaving shortly after. In a few instances, the children were never taken home. Yet, these centers appeared to bill the state for a full day of care, even for children who weren’t present, and offered kickbacks to parents involved in the scheme.
Additional footage showed a man distributing cash envelopes, suspected to be part of the kickback arrangement, to parents.
Since 2014, officials in Minnesota have been investigating such fraudulent activities. By 2018, dozens of companies were being looked into for allegedly receiving millions for non-existent child care services. At that point, investigations focused on ten specific companies.
“There’s a lot of fraud happening, and we need to ensure these funds go to the children who genuinely require them,” Chuck Johnson, the then-acting secretary of the state Department of Human Services, mentioned in an interview.
Federal counterterrorism officials have revealed that millions of these stolen funds were funneled to Somalia and, subsequently, to al-Shabaab, a group affiliated with al-Qaeda.
Importantly, it’s estimated that at least $300 million was lost from the state’s food program, along with $220 million from its autism initiative, and another $302 million related to a housing stability program.
To date, around 92 individuals have faced charges for running dubious businesses and nonprofits that received federal funding for services they never provided.
The scammers reportedly spent some of their illicit earnings on luxury items, including high-end cars and extravagant vacations. So far, 57 people have been convicted as a result of this crackdown.
