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RELEASE: House Republicans Unveil Childcare Fraud Prevention Legislation

Tuesday, May 15, 2018

SAINT PAUL, MN – On Tuesday, House Republicans unveiled legislation to prevent childcare fraud and ensure fraudulent public program dollars aren’t sent to countries on the US State Department travel ban list. A recent Fox 9 report showed upwards of $100 million of state childcare subsidies being fraudulently allocated to childcare facilities, with some of the dollars being funneled overseas.

“This eye-opening report shows how half of all childcare subsidies meant for our families and kids in need are going to care centers with the sole purpose of stealing millions of dollars from Minnesotans,” said Rep. Nick Zerwas, R-Elk River, co-author of the bill. “The widespread scale of this fraud is startling, and we need to find more ways to ensure state dollars are going to those who need them, not someone trying to defraud our state.”

The proposed legislation:

  • Allows Department of Human Services (DHS) to use “Immediate Temporary Suspensions” to close childcare providers that do not fully cooperate with investigators if they are suspected of fraud.

  • Creates criminal and civil penalties for those who transfer fraudulent public program funds to countries on the US State Department travel ban list.

  • Creates increased fraud prevention measures in public programs including Child Care Assistance Program (CCAP) and other welfare programs.

  • Directs the Office of the Legislative Auditor (OLA) to investigate CCAP.

“When criminals choose to engage in childcare fraud, they’re not only stealing from state coffers, they’re taking directly from hard-working Minnesota families,” said Rep. Matt Dean, R-Dellwood, chief author of the bill. “When parents send their kids to daycare, part of the cost goes to fund programs like CCAP for low-income families. What we now know is that half of these funds may have been used to fund fraud, some of which may be used in supporting terrorism abroad. It’s shameful this has gone on this long, and we need to take immediate steps to prevent this going forward.”

The bill will receive a House File number when it is introduced in the coming days.

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