Senate calls for hearing after Fox 9 daycare fraud investigation

ST. PAUL, Minn. (KMSP) - Minnesota lawmakers are scheduling a hearing for Tuesday after the Fox 9 Investigators exposed daycare fraud that could be costing taxpayers millions of dollars and some of that money could be making its way to terrorists overseas.

Carry-on suitcases filled with as much as a million dollars in cash are regularly leaving on flights from Minneapolis-St. Paul International Airport to the Middle East. Last year alone, government agents determined the money transfers amounted to over a $100 million. They believe a sizeable amount is coming from fraud in the state's childcare assistance program, which offers government subsidies to low-income families. 

At least 10 daycare centers are currently under active investigation for overbilling the state. Most of those centers are owned by Somali immigrants. Members of the community told Fox 9 that the fraud is widespread. It's believed some of the funds are being sent in the form of remittance payments to relatives in their homeland. Investigators also believe terrorist groups are demanding a cut of the money when it arrives overseas.

"I say absolutely, our sources tells us that,” said Glen Kerns, a detective who spent 15 years on the FBI’s joint terrorism task force. “Good sources - from the community leaders."

Governor Mark Dayton reacted to the Fox 9 report during a press conference on Monday.

"It is really disgraceful, so I appreciate the report and very important visibility," said Gov. Dayton.

Gov. Dayton said the Department of Human Services has been trying to crack down on the fraud by adding additional investigators.

"It's something we have been aware of and working against, but there is a lot more that needs to be done," he said.

State lawmakers have scheduled an oversight hearing Tuesday with the Health and Human Resources Reform Committee to discuss what the Fox 9 investigation revealed. They have asked the Attorney General, the DHS Inspector General and members of the Dayton administration to come testify.

"What is true of this, what went wrong, how can this never happen again,” said Senator Jim Abeler (R-Anoka). “So we will do a deep dive on this tomorrow."