>> Shannon: IT'S BEING CALLED
ONE OF THE WORST SCANDALS IN THE
HISTORY OF MINNESOTA.
OUR LOCAL FOX AFFILIATE HAS BEEN
INVESTIGATING AN ALLEGED SCHEME
INVOLVING DAY CARE AND WHAT
APPEARS TO BE RAMPANT FRAUD IN A
STATE PROGRAM COSTING TAXPAYERS
AS MUCH AS $100 MILLION IN A
SINGLE YEAR.
BUT WHAT'S EVEN MORE TROUBLING
IS WHERE THE MONEY IS GOING,
POSSIBLY OVERSEAS TO FUND
TERRORISM.
FOX NINE MINNEAPOLIS
INVESTIGATOR JEFF REPORTS.
>> FIVE YEARS AGO THE FOX NINE
INVESTIGATORS WERE FIRST TO
REPORT THAT DAY CARE FRAUD WAS
ON THE RISE HERE IN MINNESOTA.
WE EXPOSED HOW SOME BUSINESSES
WERE GAMING THE SYSTEM TO STEAL
MILLIONS IN GOVERNMENT SUBSIDIES
MEANT TO HELP LOW INCOME
FAMILIES WITH THEIR CHILD CARE
EXPENSES.
>> IN ORDER FOR THIS GAME TO
WORK, THE DAY CARE CENTERS NEED
TO SIGN UP LOW INCOME FAMILIES
THAT QUALIFY FOR CHILD CARE
ASSISTANCE FUNDING.
THESE SURVEILLANCE VIDEOS ARE
FROM A CASE PROSECUTED BY HAD TO
BEEN HENNEPIN COUNTY.
FACIAL PARENTS CHECKING THE KIDS
INTO A CENTER ONLY TO LEAVE WITH
THEM A FEW MINUTES LATER.
SOMETIMES NO CHILDREN WOULD SHOW
UP, BUT EITHER WAY THE CENTER
WOULD BUILD THE STATE FOR A FULL
DAY OF CHILD CARE.
AT THIS VIDEO THAT SAME CASE
SHOWS A MAN HANDING OUT
ENVELOPES OF WHAT ARE BELIEVED
BE KICKBACK PAYMENTS TO PARENTS
WHO ARE IN ON THE FRAUD.
>> WHERE WAS THE MONEY GOING?
>> I DON'T KNOW EXACTLY WHERE IT
WENT.
>> ONE RECENT FEDERAL CASE
POINTS TO AT LEAST SOME OF THE
MONEY GOING OVERSEAS.
THIS IS VIDEO BEING SWORN IN AS
A MEMORY OF THE PARK BOARD.
AS SHE WAS TAKING HER OATH OF
OFFICE SHE WAS ALSO UNDER
INVESTIGATION FOR WIRE FRAUD AND
THEFT OF PUBLIC MONEY.
STATE AND FEDERAL AGENTS HAD
CENTER IN SOUTH MINNEAPOLIS.
HER BUSINESS WAS EXPECTED OF
BILLING THE GOVERNMENT FOR OVER
A MILLION DOLLARS WORTH OF BOGUS
CHILD CARE SERVICES.
>> WE FOUND RECORDS THAT
INDICATED SHE WAS COLLECTING
SIGNIFICANT AMOUNT OF MONEY FOR
A MUCH LARGER NUMBER OF CHILDREN
THEN WERE ACTUALLY ATTENDING THE
CENTER.
>> DID ANY OF THE MONEY GO
OVERSEAS?
>> WE ARE AWARE THAT SOME OF THE
FUNDS WENT OVERSEAS, WHEN SHE
WAS CASHING OUT MONEY FROM THE
BUSINESS.
>> DO YOU HAVE ANY IDEA WHAT IT
WAS GOING FOR?
>> I CAN'T SAY.
>> CAN'T SAY OR DON'T KNOW?
>> CAN'T SAY.
>> INVESTIGATORS ANALYZED HER
CELL PHONE TO TRACK HER
ACTIVITIES.
SHE HAD TAKEN A TWO-MONTH TRIP
FROM MINNESOTA TO DUBAI AND THEN
CAN YOU STAYING AT TIMES AT $800
A NIGHT HOTEL ROOMS.
SHE USED AN APP ON HER PHONE TO
BUILD A STATE OF MINNESOTA FOR
CHILD CARE SERVICES WHILE SHE
WAS OUT OF THE COUNTRY.
SHE PLED GUILTY TO THE DAY CARE
FRAUD AND THIS MARCH STARTED
SERVING TIME IN A FEDERAL
PRISON.
SHE DECLINED A REQUEST FOR AN
INTERVIEW.
>> WE BELIEVE THAT THERE IS A
SCOPE OF FRAUD OUT THERE THAT WE
NEED TO REALLY GET OUR ARMS
AROUND AND ENSURE THAT THOSE
DOLLARS ARE GOING TO THE KIDS
THAT REALLY NEED THEM.
>> THE ACTING COMMISSIONER FOR
THE DEPARTMENT OF HUMAN SERVICES
TOLD US HIS AGENCY HAS TEN
DAY CARE IS CURRENTLY UNDER
ACTIVE INVESTIGATION FOR FRAUD.
WE'VE LEARNED THOUSANDS MORE ARE
CONSIDERED SUSPICIOUS.
SEARCH WARRANTS OBTAINED BY THE
FOX NINE INVESTIGATORS SHOW EACH
ONE OF THE SUSPECT CENTERS HAS
RECEIVED SEVERAL MILLION DOLLARS
IN CHILD CARE ASSISTANCE FUNDS.
>> HOW MUCH CONFIDENCE CAN YOU
SAY THAT IT'S LIKELY SOME OF
THIS MONEY IS GOING TOWARDS
TERRORISM?
>> I WOULD SAY ABSOLUTELY.
ABSOLUTELY.
OUR SOURCES TELL US THAT.
GOOD SOURCES FROM THE
COMMUNITIES, LEADERS.
MY PERSONAL FEELING IS WE NEED A
NATIONWIDE TASK FORCE TO CLAMP
DOWN ON THIS KIND OF FRAUD.
>> THIS CRIME IS SPREADING.
OUR SOURCES TELL US OTHER STATES
ARE NOW USING THE MINNESOTA
PLAYBOOK TO RIP OFF MILLIONS OF
PUBLIC DOLLARS MEANT TO HELP
KIDS.
I'M FOX NINE INVESTIGATOR JEFF
BALLION.
>> Shannon: IT'S GETTING
POLITICAL.
SOME DEMOCRATS SAY IT'S THE
REPORT AND INVESTIGATION ITSELF
THAT IS THE PROBLEM.
LET'S BRING IN MINNESOTA STATE
SENATE'S JIM ENABLER HE IS A
REPUBLICAN AND HE HAD A HEARING
ON THIS TODAY.
THANK YOU FOR JOINING US.
I UNDERSTAND YOU HAD A
WHISTLE-BLOWER THAT TOLD YOU
EVEN MORE.
WHAT DID YOU LEARN?
>> IT'S REMARKABLE.
FRAUD IS NOT NEW BUT A
WHISTLE-BLOWER FROM INSIDE THE
DEPARTMENT WHO GOT FIRED FOR
TALKING ABOUT IT IS BIG NEWS.
AT THE NEWS HE TOLD US ABOUT
MORE LITERALLY HUNDREDS OF
MILLIONS OF DOLLARS IN FRAUD AND
ACTUALLY SOMETHING IS NOT BEING
DONE ABOUT IT WAS JUST
REMARKABLE AND REALLY HORRIBLE.
>> Shannon: CONGRESSMAN KEITH
ELLISON, U.S. CONGRESSMAN, A
DEMOCRAT FROM MINNESOTA
OBVIOUSLY SAID TODAY FINANCIAL
STABILITY FOR THE SOMALI PEOPLE
BOTH HERE IN SOMALIA -- AND IN
SOMALIA, IS ONE OF OUR STRONGEST
PROTECTIONS AGAINST THE
TERRORIST THREATS POST.
WE SHOULD MAKE IT EASIER, NOT
IMPUTING THE COMMUNITY FOR IT.
FOX NINE SHOULD ISSUE A THOROUGH
CORRECTION AND A APOLOGY FOR ITS
REPORTING.
HOW DOES THAT LINE UP WITH WHAT
YOU KNOW FACTUALLY ABOUT THIS
STORY?
>> I KNOW KEITH, WE SERVED
TOGETHER IN THE MINNESOTA HOUSE.
JUST BECAUSE SOMEBODY WHO
HAPPENS TO BE OF A CERTAIN
ETHNIC BACKGROUND IS FOUND TO DO
SOMETHING WRONG, IT DOESN'T MEAN
IT'S ANY IMPUTING ANY PARTICULAR
POPULATION.
THIS IS NOT AGAINST SOMALIS,
THIS IS AGAINST FRAUD.
IT'S NOT ISLAMIC PHOBIA, IT'S
FRAUD-OPHOBIA.
KEITH, YOU ARE WRONG ABOUT THIS
ONE, IT'S FRAUD.
>> Shannon: I WAS READING
SEVERAL REPORTS DIGGING INTO
THIS AND THEY SET A NUMBER OF
SMALLER FAMILIES DO SEND MONEY
BACK.
OUTSIDE THE TRADITIONAL BANKING
SYSTEM BUT HELP FUNNY MONEY TO
THEIR FAMILIES AT HOME.
ONE OF THE REPORT I READ SAID
EVEN IF THEY HAVE GOOD
INTENTIONS AND LEGITIMATE
PURPOSES, MANY TIMES IN CERTAIN
SECTIONS OF SOMALIA IF THE MONEY
IS FUNNELED THROUGH THOSE,
AL-SHABAAB TAKES A CUT.
THE BAD GUYS TAKE A CUT WHETHER
OR NOT YOU INTENDED FOR GOOD OR
BAD.
>> AND THAT'S A PROBLEM.
SOMALIA IS A VERY CHALLENGED
COUNTRY.
THOSE SMALLER FAMILIES TO
ACTUALLY GO THERE AND KEEP THEM
OUT OF THE HANDS OF TERRORIST.
BUT IF THEY ARE TAKING ATTRIBUTE
THAT'S REALLY UNFORTUNATE.
ESPECIALLY IF ONE OF THE
$1 MILLION DONATIONS OR MONEY
THAT ARE GOING TO GO THERE.
>> Shannon: THESE ARE
MINNESOTA TAX DOLLARS.
PEOPLE THERE WHO ARE WORKING AND
PAYING INTO THE SYSTEM.
IT'S MEANT FOR PEOPLE WHO NEED
HELP WITH CHILD CARE, IT'S MEANT
TO HELP SUBSIDIZE THAT AND YET
IT MAY BE ENDING UP IN VERY
SKETCHY PLACES.
WE UNDERSTAND THERE HAVE BEEN
TEN DAY CARE IS UNDER
INVESTIGATION.
THOUSANDS MORE ARE SUSPECTED OF
ENGAGING IN THIS AS WELL.
WHAT IS THE PROGRESS OF THESE
FRAUD INVESTIGATIONS?
WHAT'S BEING DONE?
>> THEY ARE MOVING ALONG.
IF THE HEADLINE NEWS ABOUT
TODAY'S REPORT IS THEY ARE NOT
DOING ALL THE INVESTIGATIONS
THEY SHOULD DO.
SOME OF THEM ARE VERY CLEVER.
THEY WILL ENROLL 100 CHILDREN
AND THEN HAVE CHARGED FOR 100.
THE CURRENT PROCESS THEY KEEP
PAYING AND PAYING AND PAYING
MILLIONS OF DOLLARS OUT UNTIL
THEY CAN PROVE SOMETHING INSTEAD
OF JUST CUTTING OFF THE MONEY
STREAM, WHICH IS WHERE PART OF
THE FRAUD COMES FROM.
AND IT'S NOT FREE MONEY.
IT COMES FROM ALL OF US.
SO IF YOU ARE AGAINST FRAUD, FOR
GOOD SERVICES, FOR HELPING
COMMUNITIES DEVELOP AS THE
SOMALIS ARE DEVELOPING IN
MINNESOTA IN A VERY HEALTHY WAY,
THEN YOU HAVE TO PUT A STOP TO
THIS KIND OF THING.
>> Shannon: STATE SENATOR JIM,