Remember that allegation of $100M in child care fraud for terrorists? Here’s an update

On Monday, Minnesota lawmakers got an update on an explosive allegation in May that a state child care program might have been defrauded to the tune of $100 million to fund Islamic terrorists.

Did that really happen?

We still don’t know yet.

That was the bottom line Monday morning as the Legislature’s lead investigator briefed state House members.

Legislative Auditor Jim Nobles told lawmakers the investigation is taking longer than expected because of the complexities of the allegations and because some people are “very reluctant” to discuss the matter because the allegations involve “very sensitive matters” that aren’t public and might need their identities protected.

The investigation continues.

WHAT’S THIS ALL ABOUT?

The whole idea that potentially $100 million in child care fraud proceeds could have funded terrorists was made public in a series of televised reports by Fox 9 KMSP-TV in May.

It caused a bit of a firestorm at the Capitol and led to Nobles’ office opening an investigation to look at whether it’s true.

It also caused a bit of confusion. Here’s a story we did to help you navigate the allegations themselves — what they claimed, as well as what they didn’t. In essence, the report alleged that a number of child day care centers were falsely billing the state for taking care of children who were never there. That money was then being carried overseas, where it could have found its way into the coffers of terrorists in the Middle East and Africa.

The TV station based portions of its reporting on Scott Stillman, a former state forensics investigator who, to date, has been the only person to publicly allege the scandal.

‘MINNESOTA’S WATERGATE’?

Stillman also spoke to lawmakers Monday, and he didn’t understate the importance of what he claims happened.

“This has the potential to be Minnesota’s Watergate,” he said. “I stand by my allegations.” He said the amount could be more than $100 million — an amount state child care officials say is outlandishly high.

Stillman also implied some sort of conspiracy to prevent justice in the matter.

“I went to the FBI, Department of Justice, Homeland Security,” he said of his concerns. “I’ve gotten no reaction from them. I don’t know why.”

At another point, he spoke of politicians, “both state and federal,” who had received payments from child care agencies he believed were part of the fraud. That, he said, was why he said he never formally took his concerns to the state’s Department of Human Services, but rather went to the FBI and then-Attorney General Jeff Sessions. He didn’t name names, said he didn’t know details, and told lawmakers they needed to talk to investigators with the office of inspector general for the Department of Human Services. He said those investigators were being “harassed” and intimidated to keep their silence.

Stillman, a one-time police officer, ended his employment with the state in March, according to DHS. Further details of his separation don’t appear to be public at the moment.

He said he resigned under pressure. “I was under extreme duress,” he said. “I was demoted from my managerial position. You can’t imagine what it’s like. … You’ve got some of the most powerful people in the world trying to destroy you.”

CREDIBILITY PROBLEMS?

At least some have found Stillman not credible.

Stillman made false statements in the past, and was sued for it by a rival fraud investigator, according to a report by Minnesota Public Radio.

Several local Islamic leaders have said Stillman’s allegations and the Fox 9 reports unfairly attempt to connect cash legally being sent overseas by local citizens for relatives abroad to terrorism and fraud simply because the money is cash and the destination is in predominantly Muslim countries. It’s Islamophobic, they’ve said.

On Monday, Carolyn Ham, DHS’s inspector general, told lawmakers that the state’s 1,740 licensed child care centers in question received nearly $215 million in state payments in 2017.

That would mean that Stillman’s allegation of $100 million during that same year would amount to nearly 50 percent of the entire program.

“Child care fraud is a big problem, and it’s in the millions of dollars,” said Ham, who’s office stopped payments to 16 centers after it identified fraud and forwarded the cases to law enforcement. Those centers billed the state for $66.7 million. The referrals resulted in five felony convictions.

“However, we don’t have any evidence that’s it’s near 50 percent. Sixteen centers out of 1,700. … I do not trust the allegation that 50 percent of the money is fraud.”

Ham has hired an outside firm to look into how her office has handled the situation.

Source: https://www.twincities.com/2018/12/17/remember-that-allegation-of-100-mil-in-child-care-fraud-for-terrorists-heres-a-fresh-update/