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FOX 9's report of rampant Minnesota daycare fraud sparks concern

It follows a report that millions of dollars are being flown out of the Twin Cities in luggage.

A report that cash gained from defrauding the State of Minnesota is being flown out of the Twin Cities is raising concern among lawmakers.

You can check out FOX 9's special investigation here, but in summary, it cites public records and a dozen unnamed government sources who that said millions of dollars in fraudulently obtained cash is passing through MSP Airport every year.

Some of the $100 million cash – legal and otherwise – that passes through the airport is the result of daycare fraud, according to FOX 9 , who cite a source who claims a portion is being transported to countries in the Middle East and Africa with links to terrorist groups.

You might recall that the state announced a crackdown on child care fraud about three years ago after some providers were accused of exploiting low-income families to defraud the state.

How it works? A daycare provider will sign up a low-income family that qualifies for the child care subsidy program. Previous investigations have shown families bringing their children to the daycare center, only to bring them home minutes later.

The daycare center then bills the state for a full day of childcare.

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CORRECTION: An earlier version of this story stated that the state of Minnesota was losing $200 million through child care fraud. This was an error. The figure referred to the size of its child care assistance budget.

State figures show that since the DHS Office of the Inspector General was launched in 2011, it has recovered around $5 million in cash fraudulently obtained from the program.

Report is 'deeply troubling'

It seems as though this is still happening despite the Department of Human Services' gaining new powers to combat it.

In a statement to FOX 9, DHS Acting Commissioner Chuck Johnson said there's "a scope of fraud out there that we really need to get our arms around."

The story has already been jumped on by Republican lawmakers in Minnesota, among them gubernatorial candidate Tim Pawlenty, who says it's the "latest outrageous example of what happens when politically correct politicians look the other way when it comes to criminal behavior."

Rep. Mary Franson (R–Alexandria) is the chair of the House Subcommittee on Childcare Access and Affordability, and called the report "deeply troubling."

"Even if the fraud is a fraction of what is being reported, it is a disturbing sign that the Department has failed in their duty to protect Minnesota taxpayers, and uphold program integrity to ensure childcare assistance dollars go to those who truly need it," she said.

"By weeding out existing fraud, it is entirely possible that we could boost childcare assistance payments without the need for additional state resources.

"I have every intention of holding DHS accountable for this breach of public trust, and expect to see answers given – publicly, and before the end of the legislative session – to the serious questions raised by this report." 

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