Two child care officials charged with defrauding state of $100,000
The owner and the assistant director of a Minneapolis child care center were each charged with defrauding the state of Minnesota out of $103,500, Hennepin County Attorney Mike Freeman announced Friday.
Abdirazik Gayre, 51, of Minneapolis and Ibrahim Osman, 53, of New Hope were both charged with a single count of theft by swindle over $35,000 involving fraud committed against the Child Care Assistance Program. Gayre was the owner and director of Minnesota Child Care Services and Osman was the assistant director of the child care center.
In September, search warrants were executed and charges were filed against three Minneapolis child care centers: Children’s Choice Center, Ummah Child Care Center, Inc. and Minnesota Child Care Services. At the time, Freeman said charges against officials of the companies were a possibility after further investigation.
The searches executed at the centers and on various bank accounts controlled by Gayre found they were overbilling the state’s Child Care Assistance Program, writing checks to themselves and family members and providing kickbacks to some parents.
The Child Care Assistance Program is designed to provide low-income families with subsidies so that their child care will be free or very low cost so the parents can work or attend school. The assistance program makes up the difference to the child care centers and program is funded by federal and state taxes. The program has limited funding and as of November, there was a waiting list of more than 7,000 families.
Parents in the program are required to sign in their child at the beginning of the day and sign out the child when he or she is picked up from Gayre’s center or any other center receiving funding from the Child Care Assistance Program. Those attendance records were then used to create the billing records submitted by Gayre or Osman to the state for payment for the child. Investigators compared the attendance sheets with the billing statements, and reviewed video from a hidden camera recording everyone who went into the building from Dec. 2014 to May 2015. The result was investigators were able to determine that the two men charged for at least seven percent more children than were present, or a total of 1,673 children, according to the criminal complaint.
From July 2014 to September 2015, Gayre wrote checks to himself, to his wife and to Osman totaling $386,000. Those checks were cashed and some of the cash was then handed out to numerous parents. The kickbacks were designed to keep them from telling the state about the fraudulent billing when their children were not at the child care center and as an incentive to keep their children at the center, the complaint states.
No first appearance date has been set for Gayre or Osman. The cases against the businesses are proceeding and Minnesota Child Care Services’ trial date is June 6 and Children’s Choice Center is July 7. No date has been scheduled yet for Ummah Child Care.
The investigation of the child care centers has been conducted by the Minnesota Bureau of Criminal Apprehension and the Minnesota Department of Human Services’ Office of the Inspector General.
Gayre Complaint (PDF)
Osman Complaint (PDF)