There is No Daycare in Jail

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Mother and daughter holding hands

Childcare is more expensive than ever for families who need it as well as for the business owners run childcare centers. To ease the burden, there are federally funded state-run programs for both families and childcare businesses to apply for aid and resources.

Katie Jo Thompson spent a lot of time applying for these programs, initially qualifying as a mother of a disabled child and as an owner of a childcare business. However, she may have spent more time frauding the numbers on her applications. On July 28, 2022, Thompson pleaded guilty to stealing $329,000 in government funds from the Special Security Administration and the U.S. Department of Agriculture benefit programs.

Thompson first applied to the benefit programs on her disabled child’s behalf, receiving funds and the assistance of government paid caretakers. Qualification is based on need and fraudsters like to round down on personal income. Thompson misrepresented her household income in the applications for aid in assisting to her disabled child’s care, which prompted an investigation from SSA.

Effective fraudsters steal from more than one program and Thompson did not disappoint.  In the investigation from SSA, it was revealed that Thompson received federal Employment Related Day Care program funds to support her business.  The ERDC program requires that childcare program operators maintain yearly attendance logs. The problem was Thompson didn’t run a full capacity day care, but she wanted the money. Thompson submitted logs with names of part time children as full time and included names of children who had never attended.

Thompson apparently did not need to spend time on payroll. Upon further investigation it was discovered that instead of hiring personnel to help in the day care, she used the individuals funded by Medicaid’s Personal Support Worker Program who were supposed to have been hired to care for her daughter. This begs the question, who is taking care of her daughter?

As part of her plea agreement, Thompson will pay restitution to the agencies she defrauded.  She is set to be sentenced on Nov. 14, 2022.

Great job by the SSA Office Of Inspector General (SSA-OIG) who investigated this case.

Today’s Fraud of the Day comes from an article, “Fraudulent daycare operator pleads guilty to stealing government funds” published by The News-Review on July 29, 2022

A Roseburg woman, Katie Jo Thompson, 31, pleaded guilty Thursday to one count of theft of government funds during an appearance in federal court in Eugene.

According to court documents, Thompson received Special Security Administration and U.S. Department of Agriculture funding between January 2018 and December 2019.  During this time period, Thompson cared for her disabled child while also operating a licensed childcare business out of her Roseburg residence.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.