Report: Day care fraud in Minnesota may be used to fund terrorism

A recent investigation conducted by Fox 9 in Minneapolis, Minnesota, has found evidence that proceeds from day care fraud may be sending taxpayer dollars to areas of Somalia controlled by terrorist groups.

Fox 9's investigation of public records and "nearly a dozen government sources" may show how millions of dollars from government benefits have been funneled from day care centers in Minnesota and carried out of the country in suitcases, likely headed to regions of Somalia controlled by the al Shabaab terrorist group. Watch:

Almost weekly, suitcases loaded with $1 million cash depart for the Middle East from MSP. Sources told Fox 9 that nearly $100 million in cash left the airport in carry-on luggage. Retired Seattle police detective Glen Kerns, a national expert with 15 years of experience working with the FBI's joint terrorism task force, tracked the money and discovered it was being sent to a region of Somalia controlled by the al Shabaab terrorist group. The money goes through Hawalas, "businesses used to courier money to countries that have no official banking system," Fox 9 reported.

“I talked to a couple of sources who had lived in that region and I said, 'If money is going to this Hawala do you think it is going to al Shabaab?'" said Kerns. "And he said, 'Oh definitely, that area is controlled by al Shabaab, and they control the Hawala there.'”

The money comes from day care fraud. Five years ago, Fox 9 reported on Minnesota day care centers taking advantage of government subsidies meant for low-income families with child care expenses. The day care centers sign up low-income families for day care who qualify for child care assistance funding. "Surveillance videos from a case prosecuted by Hennepin County show parents checking their kids into a center, only to leave with them a few minutes later. Sometimes, no children would show up," Fox 9 reported. But the center would bill the state government for a full day of child care and send what appeared to be kickback payments for parents who are in on the scheme, according to Fox 9.

Acting Commissioner for the Minnesota Department of Human Services Chuck Johnson told Fox 9 that there are 10 day cares under active investigation for fraud.

"We believe that there's a scope of fraud out there that we really need to get our arms around and ensure that those dollars are going to kids that really need them," he said.

Sources who spoke to Fox 9 said the fraud is so widespread that people buy shares of day care businesses to get a piece of the money made from fraud. The scam may be costing the state as much as $100 million per year, which Fox 9 reports could account for nearly half of all child care subsidies in Minnesota.

Kerns said it was "absolutely" likely that this illicit money is being sent to terrorist groups.

"I say absolutely, our sources tell us that. Good sources, from the community leaders," he said. "My personal opinion is we need a nationwide task force to clamp down on this type of fraud."

#mc_embed_signup{background:#fff; clear:left; font:14px}
/* Add your own MailChimp form style overrides in your site stylesheet or in this style block.
We recommend moving this block and the preceding CSS link to the HEAD of your HTML file. */