Cashing In On Kids

A Watchdog Report
By Raquel Rutledge of the Journal Sentinel

The newspaper spent four months investigating the $340 million taxpayer-financed child-care system known as Wisconsin Shares and uncovered a trail of phony companies, fake reports and shoddy oversight.

The program was designed to give low-wage working parents assistance with child care, encouraging them to get and keep jobs, rather than stay on welfare. While the need in many of the 34,000 cases is genuine, the system allows child-care providers and parents to easily con the system, capitalizing on children for public cash.

The Journal Sentinel focused on the five Wisconsin counties with the highest number of subsidized child-care recipients - Milwaukee, Dane, Racine, Kenosha and Brown counties.

Among the findings:

• Counties accept almost anything as proof of employment for parents seeking child-care assistance. Notes from employers, phone conversations, checks stubs - all of which are easily fabricated - serve as sufficient proof. As a result payments are sometimes approved based on bogus jobs.

• Caseworkers sign off on child-care arrangements that defy the imagination. In one instance, child-care funding was approved for 85 hours a week even when children were in school all day. If the statements were to be believed, the children would almost never be home. In another case, a woman was granted child-care assistance to work 236 of 238 days, including the day she gave birth to her seventh child.

• Regulators seldom revoke licenses for fraud and are slow to act even when they have strong evidence. In at least two cases, government officials suspected that providers were falsifying documents for three years before finally moving to shut down the child-care operations. Prosecutors have filed only one child-care fraud case in the past five years.
Child-care scams rake in thousands

The Journal Sentinel spent four months investigating the $340 million taxpayer-supported program and uncovered an array of costly problems - including fraud. But the investigation also revealed a system rife with lax regulations that have paved the way for abuse by parents and providers.

Consider:

• Sisters or other relatives can stay home, swap kids and receive taxpayer dollars. The four Racine sisters took in as much as $540,000 in taxpayer dollars in less than three years, mostly to watch each other's kids.

• Rules allow parents to be employed by child-care providers and enroll their children at the same place. At some centers, children of employees make up the majority of kids in day care. In one Milwaukee location, an employer and parents are accused of teaming up to bilk the system out of more than $360,000.

• Child-care subsidy recipients have been allowed to work for almost any type of business. Payments were made when moms claimed to work ironing a man's shirts, drying fruit and selling artwork they made during art class.

• The government pays for child care while parents sleep. Counties have no way to monitor whether parents are actually sleeping while their kids are in day care.
Child care loopholes lead to easy money

In addition to posing a potential safety risk to the state's neediest children, some criminals appear to be conning the child-care system, doctoring attendance records, the Journal Sentinel found. It's difficult to gauge the full scope of child abusers in the system because even when police and child-welfare workers find substantiated cases, not all abusers are criminally charged. And when they have been charged, many of the details are considered private information. To tell this story, the Journal Sentinel reviewed thousands of pages of public documents and obtained from sources dozens of additional documents that state and county regulators refused to release.
Child-care providers with criminal past getting licenses, state funds

State legislators called for a series of new reforms to the state's troubled child-care program, including a measure that would ban certain criminals from getting into the child-care business and collecting public funds. The action came in response to a Journal Sentinel story that detailed how the state allows criminals to become child-care providers and receive hundreds of thousands of dollars from the taxpayer-supported Wisconsin Shares program.
Legislators press for ban on criminal child-care providers

State regulators misspent nearly $20 million in taxpayer-supported child-care funds in 2008, according to estimates in a state audit released Friday.

The Legislative Audit Bureau's examination of the Wisconsin Shares child-care program found fraud and other problems in dozens of cases.
State audit finds nearly $20 million in fraud

A Milwaukee woman known as the "day care pimp" was sentenced to five years in prison Monday for bilking the state's taxpayer-funded child-care program out of at least $369,000.
Woman gets 5 years for child-care fraud

Nicole Brown, a felon with ties to Milwaukee crime boss Michael Lock, has been operating Jasmine's Learning House and collecting hundreds of thousands of taxpayer dollars for more than a year after her conviction.
Day care provider linked to crime boss loses license

A Wisconsin woman accused of scamming the state's taxpayer-funded child care program out of more than $100,000 now faces felony theft charges, in one of the largest cases of its kind in state history.
State caregiver accused in $100,000 scam

Several years before she opened her Milwaukee day care center, Shalanda Lock went by the name "Pleasure." Police and prosecutors say she danced in strip clubs and sold sex across the Midwest. And she isn't the only day care provider with ties to convicted crime boss Michael Lock.
Crime family reaps child-care cash

A Kenosha County child-care provider whose fraudulent activity was detailed in a Journal Sentinel series this year is back in business - billing the state for more than $1,400 in recent weeks
Suspect child-care business gets more state cash

State regulators are launching a series of public hearings around the state seeking input from child care providers, parents, government workers and other stakeholders to help curb fraud in the state's day care system.
State regulators to hold public hearings on child care reform

Those who seek city zoning approval to operate child-care centers in Milwaukee would face a higher level of scrutiny under a resolution recommended Friday.
City focuses on child care

The mother of the infant girl who died Sunday appears to have provided Milwaukee County with bogus employment information to qualify six of her children for taxpayer-funded child care. Two of the kids don't even live in Wisconsin. The cost to taxpayers: more than $1,300 per week.
Mother of dead baby is subject of child-care probe

Gov. Jim Doyle has repeatedly said he plans to link the quality of a day care to the amount the center receives in taxpayer funded child-care subsidies. But a closer look at his proposed budget by the Journal Sentinel shows it won't happen in the next two years, if ever.
Day care incentive absent from Doyle's budget

The Joint Legislative Audit Committee voted unanimously Thursday to launch a full-scope audit of Wisconsin Shares, a major move designed to combat fraud within the $340 million taxpayer-funded child-care system.
Audit of child care subsidy program wins backing

Gov. Jim Doyle plans today to unveil sweeping changes to the state's taxpayer-funded child-care system, including a new rating system that requires providers to meet specific standards to qualify for payments.
Doyle plans child-care reform

The state has overpaid day care providers at least $13.7 million in recent years - including millions of dollars spent on bogus child care that was never delivered, according to the state's own records.
Millions down the drain

Gov. Jim Doyle on Wednesday unveiled the first part of his plan to bolster oversight of the state's taxpayer-funded child-care system - pushing a requirement that parents use swipe cards to electronically log their children in and out of day care centers.
Doyle unveils day care oversight

Racine County child-care regulators turned over two cases to the district attorney's office on Tuesday for possible criminal fraud charges inside the Wisconsin Shares program.
Charges possible in Racine County child-care cases

The Racine County Sheriff's Department will take over child-care fraud investigations in the county after reports of fraud and abuse within the taxpayer-funded Wisconsin Shares system.
Racine sheriff to check for fraud

The two co-chairs of the state's Joint Legislative Audit Committee agreed Thursday to move forward with requests to audit the Wisconsin Shares child-care subsidy program.
Lawmakers move ahead with requests to audit child-care program

Thirty-two Democratic legislators signed a letter Tuesday calling for a comprehensive audit of the state's taxpayer-funded child-care program and asking that it examine every element from initial intake to the final payment.
Lawmakers call for audit of state's child-care program

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Cashing in on Kids