Springfield, Ill: Tarnavis A. “Bonnie” Lee and three others Chicago Women Indicted for Allegedly Defrauding Child Care Subsidy Program of More Than $1 Million
(STL.News) – A grand jury has returned indictments that charge four Chicago women with allegedly defrauding a government child care subsidy program intended to provide affordable child care to eligible parents. Each woman owned and operated a licensed day care in Chicago that allegedly submitted false claims for payment for child care services that were not provided or were not provided to the extent charged. As a result of the alleged schemes, the estimated loss to the government is more than $1 million.
The Illinois Department of Human Services administers the Child Care Assistance Program with state funds and block grants provided by the U.S. Department of Health and Human Services. The program provides child care services to low-income parents transitioning from educational programs or welfare to work and economic independence. Parents are required to make a co-payment based on their ability to pay and the remainder is paid by the Child Care Assistance Program.
Those charged are Tarnavis A. “Bonnie” Lee, 41, owner and operator of Lee’s Toddler Town, Inc.; Demetra M. Jackson, 41, owner and operator of Jitter Bugs, Inc.; Elizabeth McFarland, 46, currently of Madison, Tenn., who owned and operated Tater Tots, Inc.; and, LaShanda Hudson, 39, who owned and operated a day care business in her name.
Lee is charged in two indictments, one with Jackson and one with McFarland, for operating similar fraud schemes. Lee, who owned Lee’s Toddler Town day care, participated in the subsidy program as a licensed child care provider and submitted claims for services. The indictment against Lee and Jackson alleges that from March 2016 to April 2019, the two women received child care subsidy money by submitting false information regarding applicants’ eligibility and the type of child care and services actually provided. Lee allegedly submitted application forms, on behalf of parents, that contained false information about their employment and income, the time a child would spend at Jackson’s Jitter Bugs day care, the number and names of children, and the location where the services were provided. Payments to Jitter Bugs were deposited to an account that the two women controlled. When payments were received, more than one-half of the funds were transferred to accounts over which only Lee had control. In addition, Lee repeatedly made kickback payments to parents who were purported clients of Jitter Bugs. The two continued to submit false claims for payment even after Jackson had moved from her residence, the licensed day care address. As a result, Lee and Jackson allegedly submitted approximately $312,000 in claims with a loss to the government of more than $140,000.
In addition, Lee is charged in a second indictment with McFarland, who owned and operated Tater Tots, Inc., in Chicago, for allegedly operating a similar fraud scheme from June 2009 to April 2019. False applications and claims for payment were allegedly submitted for child care and services through the Child Care Assistance Program, and upon payment, more than one-half of the payment received was transferred to Lee. Kickback payments were allegedly paid to parents. The indictment alleges that false claims continued to be submitted even after McFarland moved in August 2016 to Nashville, Tenn. As a result of the alleged scheme, Lee and McFarland submitted claims of approximately $1.5 million with an estimated loss to the government of more than $800,000.
The third indictment charges Hudson with operating a similar fraud scheme on behalf of her personal day care business in Chicago from January 2009 to November 2019. Hudson allegedly submitted false records and information regarding applicants’ eligibility as well as information about the type of care and services and the extent of services actually provided. Hudson also allegedly made kickback payments to parents who were purported clients. As a result of the alleged scheme, Hudson submitted claims totaling approximately $734,000 resulting in an estimated loss of more than $400,000.
Specifically, the indictment against Lee and Jackson charges each woman with 17 counts of mail and wire fraud; Lee is additionally charged with eight counts of money laundering. The indictment of Lee and McFarland charges Lee with 35 counts of mail and wire fraud and seven counts of money laundering; McFarland is charged with Lee, with 12 counts of mail and wire fraud. Hudson is charged with 12 counts of wire fraud and nine counts of money laundering.
Each woman will be issued a summons to appear for arraignment in federal court in Springfield. If convicted, the maximum statutory penalty for each count of the offenses of mail fraud, wire fraud and money laundering is up to 20 years in prison.
The charges were investigated by the Illinois State Police, Medicaid Fraud Control Unit; the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations; and, the Federal Bureau of Investigation. In addition, the Illinois Department of Health and Family Services, which administers the Child Care Assistance Program for the state of Illinois, assisted in the investigation. Assistant U.S. Attorney Timothy A. Bass is representing the government in the case prosecution.
Members of the public are reminded that an indictment is merely an accusation; each defendant is presumed innocent unless proven guilty.