Since the Minnesota Department of Health and Human Services (DHS) fully-staffed their new child care fraud investigative unit in the spring of 2014, they’ve worked with the FBI to shutter daycare centers around the state. Of the cases that have hit the news since then, all have involved Somali-run businesses.
Khadra Abdisafad Hirsi, 47, was the director and co-owner of Ace Daycare Center in Eden Prairie. In February, Hirsi pleaded guilty to knowingly submitting fraudulent claims to the state of Minnesota’s Child Care Assistance Program. From November of 2011-May of 2013, Hrisi 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. Earlier this month Hirsi was sentenced to one year and one day in federal prison and ordered to pay $300,000 in restitution.
Hirsi, who also goes by the name of Khadra Duale, was employed by the City of Eden Prairie as a part-time community services technician, also known as the immigrant liaison, from October 2003-September 2011, she was also part-time staff at the Eden Prairie community center. Hirsi was paid $284,944 in salary and $35,806 in health and dental benefits by the city during that time. She co-owned the Ace Daycare in Eden Prairie with her husband Mohamed F. Arab, although there were no charges against him. The Eden Prairie news called Hirsi and her husband “leaders in the Somali community” in a 2009 video interview featuring the couple. They filed for bankruptcy this summer according to public records.
The Ace Daycare building was leased to to Hirsi by the city of Eden Prairie starting in September 2010, while she was still working for the city. The lease was transferred in October of 2013 to Roda Farrah Moahmed, owner of Light House Daycare. In March of 2015, the city renewed the lease to Lighthouse which will run through October 2020. Lighthouse is licensed with the state of Minnesota, and was fined $400 in March of this year by the state for failing to submit background studies for multiple staff members
Deqo daycare center, which had three locations in Apple Valley, St. Paul, and Minneapolis was shut down in 2013 due to licensing violations and prosecutors charged husband and wife Ahmed Aden Mohamed and Yasmin Abdulle Ali for bilking the state out of nearly $3.7 million, $3.1 million of which was collected from April 2012-January 2013. The duo had recruited more than 100 parents to enroll their own children in the program.
Salama Child Care Center in Minneapolis was raided in May of this year by the FBI and state agents. Salama is run by Ardo Diriye whose daughter Farah Adid is the Director of Operations and is “also licensed to provide standardized day care and preschool curriculum.” Per KSTP News, the search warrant indicated that there was a large discrepancy between the number of children attending and the number receiving state funds. The investigation is ongoing and includes suspicion of wire fraud, aggravated identity theft and theft of public money.
Yasmin Muhina Salim, owner of Kind Heart Day Care Center in Mankato, was arrested in June of 2014 for defrauding the state for $12,000 over a three month period.
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.”
The prevalence of Somali-run daycare providers being found guilty of fraud by the new investigative unit may be a coincidence. Ongoing investigations by the child care investigative unit are not public information. The $4 million + in fraud that’s been discovered so far represents just 1% of the estimated $418 million in child care payments made by the state in 2014-2015.