You may have read about the increasing arrests in a scam involving Wisconsin's child care subsidy program. This week two more child care providers pleaded guilty to federal fraud charges, and in light of news reports uncovering the scam, similar cases are expected to follow.
The scam takes advantage of the state's taxpayer-funded child care system known as Wisconsin Shares. It's designed to provide assistance with child care costs for parents with low incomes, encouraging them to find and keep jobs instead of staying on welfare. The program makes direct payments to child care providers chosen by the parents, who only have to show proof of low-income employment to qualify.
But the size and lax regulations of the $340 million program make it an easy one to cheat. Many applicants find a friend to provide false proof of employment, and another friend to act as the child care provider. That provider can then split the subsidy with the parent and false employer without doing any actual child care or work.
The defendants who pleaded guilty this week are a married couple accused of cheating Wisconsin Shares out of roughly $175,000 over three years through their Milwaukee child care service. The wife's sister and another woman are accused of conspiring with the couple to collect $3 million in taxpayer subsidies. The sister has already pleaded guilty and the third woman will go on trial next month. The couple convicted Tuesday could face up to 20 years in prison, but will likely see a much smaller sentence under federal guidelines.
Often when a fraud scheme is widespread, its discovery starts out small, but indictments begin to pile up quickly. It took several years for the Wisconsin Shares scam to be fully exposed, but now that the government is aware of its size, there's a good chance that many people who use the system honestly or are only tangentially related to a scam attempt will be wrongly accused.
If you find yourself accused of fraud from this scam or another one, you'll need an attorney who's well-versed in white collar criminal defense. Your case will require a lawyer with extensive knowledge of the scam's details, related charges and sentencing possibilities to effectively defend you and avoid the most serious penalties.
Source: The Milwaukee Journal Sentinel, "Two child care providers plead guilty to fraud charges," John Diedrich, May 18, 2012