Minnesota Daycare Centers Searched in New Potential Fraud Case

Credit: (City of Eden Prairie)
Credit: (City of Eden Prairie)

Daycare Center Sold After Owner’s 2013 Fraud Conviction Now Under New Investigation

EDEN PRARIE, MN – Eden Prairie Police executed a search warrant at a daycare center last week as part of an ongoing fraud investigation.

The daycare center under investigation is the one that replaced the Somali run center whose owner was convicted of bilking the state out of more than $300,000 between 2011 and 2013. The Alpha News report, “Minnesota state and city taxpayers lose big on Somali-run daycare fraud, from August 19, 2015, gained national attention from conservative sites around the country.

Minnesota Department of Human Services Commissioner Emily Piper told KSTP that on July 13, 2016, authorities executed a search warrant of the Lighthouse Daycare Center in Eden Prairie and Moon Light Daycare Center in St. Cloud. They also searched the homes of each of the owners of the two centers.

Police say the searches are part of an ongoing theft investigation concerning the Child Care Assistance Program. In a statement made to KSTP News, DHS Commissioner Emily Piper said that DHS, along with the Minnesota Bureau of Criminal Apprehension, the Eden Prairie Police Department and the US Department of Health and Human Services, are conducting collaborative investigations on two unrelated cases, and the search warrants are part of the investigations:

“I am very concerned by the allegations of misuse of public funds, especially when so many people need child care assistance who cannot access it,” Piper said in a statement. “The DHS Office of Inspector General will continue to participate with law enforcement in these investigations and we will continue work with federal and state law enforcement agencies to pursue and support criminal prosecutions in cases where we believe there is fraud.“

Lighthouse Daycare Center’s owner,  Abdillahi Mohamed, told EdenPrairieNews.com that he is of Somali descent. The report said, “[he] believes law enforcement ‘without having any evidence is targeting my community.'”  He also stated to KSTP.com, “I feel strongly because of my ethnicity this happened. There is tension against communities in this place…Without having any proof, I have been attacked by more than 20 officers.”

Long List of DHS Violations

DHS cited and fined Lighthouse Daycare in the past for violations including: failure to comply with staff distribution requirements; failure to supervise children; failure to comply with staff orientation and training requirements; failure to maintain minimum amounts of equipment, supplies and materials; failure to comply with health and safety requirements; and failure to meet USDA nutritional guidelines.

The EdenPrairieNews.com article shows Mohamed claimed he purchased the business a few months ago and the violations occurred before the time of the purchase, and that he has been working to get a new license from the state.

Mohamed’s claims don’t match up with tax filing records. The Minnesota Secretary of State website shows the business filing for Lighthouse Daycare Center occurred on October 21, 2013.  Abdillahi Mohamed is listed as the Chief Executive Officer on the Secretary of State website.

As recently as October 2015, Lighthouse Daycare in Eden Prairie had 36 citations issued by the Minnesota Department of Human Services.  DHS issued an Order of Conditional License in a letter that read: “Lighthouse Daycare Center, Inc. has only been licensed since April 2014. However, based on the number, nature and severity of the licensing violations determined during the license review, the Commissioner is placing the center’s license on conditional status for two years, beginning October 9, 2015.”

Previous Owner’s Fraud

In the Alpha News report from August 2015, it was noted that on October, 15, 2013, the City of Eden Prairie-owned building housing Lighthouse Daycare Center, was leased by the City of Eden Prairie to Roda Farrah Mohamed for an annual amount of $66,500.

Prior to Lighthouse Daycare Center, The City of Eden Prairie leased the building to “Ace Daycare Center” from 2010 to 2013.  The co-owner and director of Ace Daycare Center, Khadra Abdisafad Hirsi pleaded guilty to knowingly submitting fraudulent claims to the state of Minnesota’s Child Care Assistance Program.

From November of 2011 through May of 2013, Hirsi inflated the number of children using her daycare’s services and fraudulently obtained $300,000 in payments from the State of Minnesota and the U.S. Departments of Health and Human Services. Hirsi was sentenced to one year and one day in federal prison and ordered to pay $300,000 in restitution.

In our August 2015 report, Alpha News unveiled a total of $4 million of taxpayer dollars had been lost due to fraud committed by multiple daycare center owners:

DHS’s Office of the Inspector General’s (OIG) report for 2014  stated that “The OIG is seriously concerned about a pattern of child care fraud activities that involves deception and exploitation. It begins with recruiting parents as child care center employees with the condition that they enroll their children in a child care assistance program (CCAP) to ensure public funds revenue for the business; the scheme ends with exploiting four sets of victims: the children, parents, those on the Child Care Assistance Program waiting list and taxpayers.” ~ Minnesota state and city taxpayers lose big on Somali-run daycare fraud, August 19, 2015

Unusual Activity Reported by Residents

Lighthouse Daycare (Eden Prairie) parking lot on a recent Saturday afternoon.
Lighthouse Daycare (Eden Prairie) parking lot on a recent Saturday afternoon.

Eden Prairie residents (requesting to remain anonymous) have questioned the unusual amount of activity witnessed during off-hours at the Lighthouse Daycare Center. This includes numerous cars in the parking lot on evenings and weekends. Calls made to authorities regarding the activity resulted in city officials telling concerned residents that they should participate in the city’s “cultural sensitivity training.”

Lighthouse Daycare parking lot on a recent Sunday evening, around 7pm.
Lighthouse Daycare parking lot on a recent Sunday evening, around 7pm.

An email was sent by Alpha News to David Lindahl (City of Eden Prairie, Economic Development Manager, Community Development Department) questioning his knowledge of Lighthouse Daycare and the investigation.  Lindahl said that the investigation stemmed from a Nov. 18, 2015 Eden Prairie Police report “of a suspicious incident that occurred at Lighthouse Day Care (8098 Glen Lane). As a result, Police have opened a theft investigation related to activities at the center. On July 13, 2016, at approximately 7:30 a.m., Eden Prairie Police conducted a search warrant at this location, related to the ongoing investigation. No arrests were made and no further information is available at this time.” 

Lindahl says the City was not aware of any activity occurring at the daycare center after hours, but that the DHS regulates the licensing and hours for daycare centers and is the entity responsible for conducting background checks of childcare center owners, not the City of Eden Prairie regardless of the fact that the city owns the building.  He referred all other questions to the DHS.

Follow Alpha News for more information as more details become available.