Testimony Highlights Child Care Fraud Issues in Minnesota
A former police officer and investigator with the Minnesota Department of Human Services (DHS) stated this week that state officials attempted to suppress findings from reports on child care fraud. The testimony included claims of harassment directed at their unit by DHS staff.
Jay Swanson shared details of his experience as a criminal investigator for the Child Care Assistance Program, expressing that he often accompanied colleagues as they conducted interviews at various child care centers under investigation. “When I’d ask owners and employees about how they learned of daycare fraud, they often mentioned hearing it first in a refugee camp in Kenya,” he recounted. Many claimed they were aware of the illegality but saw Minnesota as the most profitable state in which to operate the scam.
Swanson also highlighted that during the investigations, DHS and the Bureau of Criminal Apprehension uncovered substantial billing fraud at a child care center. Investigators involved were then joined by federal agents from agencies such as the FBI and the IRS. This led to the owner of Salama Child Care Center being federally indicted in 2017, eventually pleading guilty and serving two years in prison while also being ordered to repay over $1.4 million.
He mentioned the center was located on Nicola Avenue in Minneapolis, a location familiar to some due to a YouTube video shot at another center operating there. By mid-2018, Swanson’s case had caught public attention, prompting Congress to request an audit of the CCAP program.
While preparing responses to inquiries from the Legislative Auditor’s Office, he faced pressure from a DHS official to route his answers through them instead. After submitting his findings on fraud trends, he recalled a senior DHS representative arriving visibly upset, demanding he remove parts of his report. “This seemed illegal to me,” Swanson remarked, explaining that state law requires cooperation with the Auditor’s Office.
A few days later, the same official warned him about the consequences that would follow. “Afterward, our unit faced relentless harassment from DHS personnel,” he noted.
Swanson elaborated on the issues, detailing that DHS hired an inexperienced consultant to undermine his findings and included misleading notes in his performance evaluations. The department initiated a fraud investigation unit and subjected staff to demeaning meetings where they were often criticized.
“In my 40 years in state government, I’ve never witnessed such treatment of employees,” he stated, indicating that the DHS deputy secretary was present during these sessions.
Over the following months, employees were gathered for numerous group meetings that consumed significant time, hindering actual investigative work. Swanson described observing signs of a loosely organized criminal operation targeting Minnesota’s public benefits system during this period.
