Frederica Freyberg:
Now on to other state news, Wisconsin Secretary of Children and Families Reggie Bicha says the jig is up for fraudulent childcare providers. Tonight, part two of our series on the Wisconsin Shares child care program with a look at how investigators cracked the code and cracked down on the child care fraud.

Djordje Rankovic:
Some of the data that we received might indicate fraud.

Frederica Freyberg:
This retired police officer now works for the state as part of the anti-fraud task force, making cold call visits to child care homes and centers to check records and numbers.

Djordje Rankovic:
We did check the documents and found a few discrepancies which we will have to examine.

Frederica Freyberg:
It's back on the road for more intel.

Djordje Rankovic:
The hotline tipped on this location. That's one of the reasons we are going there.

Frederica Freyberg:
Each child is worth up to $200 a week in government childcare subsidies for the providers. Children were supposed to be enrolled in daycare at this home, two shifts of eight children. No one is home, instead. To investigators, it's called "no access." It's a big red flag. Both locations we visited with the investigators are now suspended and under criminal investigation for suspicion of fraud.

Man:
Do you have the records for that?

Frederica Freyberg:
Add these providers to the list of 200 providers suspended and revoked since the crackdown.

Henry Wilde:
We had one provider that had authorizations for over 220 children, of which 210 were children of employees.

Frederica Freyberg:
That percentage of employees' children is tagged as a red flag on the department's new computer program designed to track suspected fraud.

Henry Wilde:
The child care employee themselves brings their own children. So that employee is brought on board because they have five children or six children. The fraudulent provider would say, "I'll pay you a fee as opposed to a wage, and you can just stay home with your kids."

Frederica Freyberg:
According to the state, Tammy's Tots was the daycare center where 210 of the children enrolled were children of employees. The owner of this center was paid more than $250,000 in Wisconsin Shares subsidies in the month of August alone before the state suspended her from the program for suspicion of fraud. One state office now exclusively pores over the attendance records, for signs of red flags.

Henry Wilde:
One is, the records are blatantly copied from one week to the next with dates whited out. Do I believe I can trust anything on that attendance record? Absolutely not.

Frederica Freyberg:
In addition to fraud going undetected for years, child safety could have been in jeopardy. In December, a legislative audit found that eight felons or child abusers in seven different counties across Wisconsin were either employed by or living in child care facilities. More than 300 convicts of misdemeanor crimes like disorderly conduct are still being tracked down. Additionally, the audit found four matches of registered sex offenders with childcare provider addresses. Two of the offenders' whereabouts were determined unknown and two were determined not to be living at the childcare address. The Department of Children and Families says no children were injured. New laws on the books as of late 2009 to ensure child safety require frequent background checks and specific cross checks with the sex offender registry. It keeps coming. In January, police arrested this provider for selling pot out of her Milwaukee daycare home. She's charged with two felonies and her daycare has been shut down.

David Feiss:
There are a number of daycare providers who have connections to people in the drug business.

Frederica Freyberg:
David Feiss is a prosecutor working the fraud cases in the Milwaukee County district attorney's office.

David Feiss:
This is certainly the largest misuse of public funds that we have ever been involved in investigating and prosecuting.

Frederica Freyberg:
One of the providers that he has prosecuted so far is 61-year-old Jurlean Bailey. She has three counts of fraud and faces 30 years in prison in connection with the operation of her Ark of Safety child care center and the use of Wisconsin Shares payments. Charging papers say Bailey defrauded the state of nearly a million dollars by providing false employment information for more than 70 women from 2007 to 2009.

David Feiss:
The women were being recruited and they were being offered employment. As a condition of that employment, they needed to enroll their children in daycare. The allegations were that vans would pick up the women and the children, take them to daycare, drop them off there for a brief period of time, 45 minutes to an hour. And load them back on the vans and take them home and then pick up another set of women and children. There were allegations that on certain days, women and children never even got off of the vans.

Frederica Freyberg:
When Ark of Safety was shut down, a nearby provider had people she presumed were out of a job there stop by her center looking for work.

Tina Carr:
She said, "It's about 30 children that come along with me and my husband," and I go, "I can't do it like that."

Frederica Freyberg:
Tina Carr says she's not in trouble with the regulators and is dedicated to providing quality care. She was surprised her neighbor to the north was charged with fraud and faces prison time because Bailey also is pastor of a church. She also owns three publicly funded elder care homes across the street from her closed down child care center. Those homes are also now under investigation by the state because of the fraud charges against her. Bailey's attorney says she has committed no crimes and is not guilty. Specifically, the attorney says Jurlean Bailey has never recruited anyone to enroll their children at Ark of Safety daycare. They were referred by a private firm the state contracts with under its welfare reform program. The lawyer says that firm almost exclusively sent the Hmong and Somali families to the center. In addition to fraud allegations, child care conditions in Milwaukee and elsewhere have the state taking notice.

Henry Wilde:
It wouldn't surprise you to know that fraudulent child care providers are also terrible child care providers.

Alberta Darling:
We could put millions of dollars into quality early childhood education that we are now throwing into some very bad child care situations.

Frederica Freyberg:
Sen. Alberta Darling will get the chance to put millions in a new program to promote quality in Wisconsin Shares. The joint finance committee will vote whether to approve Gov. Jim Doyle's YoungStar child care rating system that he announced in January.

Jim Doyle:
We will improve the overall quality of child care in Wisconsin.

Joyce Mallory:
You have to have teachers who have a commitment to the profession, and they have to have the skills and knowledge.

Frederica Freyberg:
Joyce Mallory is director of Malaika Early Learning Center in Milwaukee, where the governor announced the launch of the YoungStar five-star rating system that will reward quality.

Jim Doyle:
We will link quality to Wisconsin Shares payments. This has been one of the most controversial parts of it. As I said, let's pay the best for what they are doing for us and not pay the worst the same as what the best are receiving.

Frederica Freyberg:
The facility is modern, equipped and spotless. Seventy-six of the children are Wisconsin Shares enrollees. Here its director isn't sure she would be a five star center on the state's new quality ranking.

Joyce Mallory:
I certainly hope I'm at a four if they rated me today. By the time it's fully implemented, we will be at a five.

Frederica Freyberg:
The Department of Children and Families will implement the rating system. The money to do so comes from 10 million dollars saved already in Wisconsin Shares, mostly because of suspect centers being shut down and payments to them shut off.

Frederica Freyberg:
The Joint Finance Committee is expected to vote on the program later this month. As for suspended providers, the shut-off of payments ahead of appeal has Milwaukee daycare owners going public over the process.

Shanquill Merriwether:
We're waiting and we're waiting with no pay. This is a huge problem because our families suffer and our employees' families suffer.

Frederica Freyberg:
That side of the story next week on "Here and Now."