HHS gets serious about fraud

WORLD-HERALD EXCLUSIVE
New to Omaha, the Detroit woman left a message on the voice mail of her Nebraska caseworker: Her 9-year-old daughter was on the way to stay with relatives and no longer would be living in her house.

Despite that, the Nebraska Department of Health and Human Services continued to pay $1,700 over the next three months in child care for the daughter.

The Omaha man left this note on his application for welfare benefits: He was paying child support to the Denver court system.

Despite that, HHS continued to pay child care expenses for his daughter for more than a year.

For months, state workers failed to pick up on the signs that could have led them to their eventual conclusion: Both the parents and their child care providers were bilking the state by repeatedly billing the system for imaginary care.

Not only were the children not in child care, authorities say, they weren't even in Nebraska.

Yet all told, the state paid out more than $30,000 to the parents and their day care providers. As part of the schemes, authorities now say, one mom even demanded a cut of the state money a child care provider was getting for the phantom care.

Now HHS fraud investigators and Douglas County prosecutors have brought criminal charges against the parents and child care providers.

Since 2005, when 100 lawsuits were filed against child care providers for collecting $250,000 more than they deserved, the state has gone after overbilling child care providers primarily in civil court.

These felony prosecutions are representative of the handful of fraud cases HHS pursues in criminal court each year, an HHS spokeswoman said.

Douglas County Attorney Don Kleine said the prosecutions should serve as a warning not to try to game the system.

Kleine said he suspects that these cases are just “scratching the surface” of subsidy abuse, and he applauded HHS fraud investigators' attempts to crack down. If convicted, the defendants could face up to 25 years in prison on theft charges.

“This is nothing more than a fraud perpetrated on taxpayers,” Kleine said. “They're taking advantage of the system — taking advantage of taxpayers — and we're not going to let them get away with it.”

According to arrest warrants and investigative reports obtained by The World-Herald:

Tina Ross, a single mother, moved with three of her children to Omaha from Detroit in March 2009.

That same month, Ross, 27, went to a state office to apply for government assistance for herself and her three children. She applied for child care benefits under Title XX, a government program that helps low-income parents work or go to school by paying a share of their child care bills.

She told a state caseworker she planned to enroll in cosmetology school. In the meantime, she told the caseworker, she made about $7 an hour, working 20 to 25 hours a week at McDonald's.

Prosecutors say that wasn't the only income she was cooking up.

By May 31, 2009, she moved back to Detroit with her three children.

However, she had her child care provider, Debra McDavid of Omaha, continue to list her three children as being in McDavid's care for six to seven hours a day from June 1 through Aug. 31, 2009. HHS paid $6,647 for care and transportation of the children in those three months.

Confronted by HHS fraud investigator Jana McDonough, McDavid acknowledged that she had not cared for the three children after May 31 but continued to bill the state. In a written affidavit on Oct. 29, 2009, McDavid also wrote that she never had taken care of Ross' oldest child.

Long before McDavid's statement, HHS had notice that the oldest child wasn't eligible for care. On April 29, 2009, a caseworker noted that Ross had called and left a voice mail “that her oldest daughter is no longer in the HH (household).”

Even so, the state continued to pay for care of that child over the next three months.

McDavid wasn't the only one benefiting from the scheme, prosecutors say.

Authorities allege that Ross requested and received a cut of the payments — $400 a month — from McDavid. Investigators obtained receipts showing that McDavid had wired $400 a month to Ross.

“Tina came to me with a deal to keep billing (for) the kids and split the money,” McDavid wrote in her affidavit.

Investigators accuse McDavid of taking $5,297 and Ross of taking $1,350 on top of the monthly cut they allege she received from McDavid.

Prosecutors charged McDavid, 50, with theft and assistance fraud — felonies punishable by up to 25 years in prison. Prosecutors say Ross is facing charges in Michigan.

Neither woman had a working phone number and could not be reached for comment.

Authorities say that wasn't the only misuse of child care assistance.

In a second case, investigators say Adonus Marshall of Omaha collected $6,700 and Omaha child care provider Tanya Murph collected nearly $18,900 in government assistance by submitting false child care claims.

According to court documents and investigative reports in that case:

In April 2008, Marshall, 31, applied for a number of governmental assistance programs, including Aid to Dependent Children, food stamps, Medicaid and child care.

Marshall wrote that he was his daughter's sole provider because her mom was in prison.

He told a caseworker he needed the state to help pay for care for Adonyae, his daughter, while he worked his minimum-wage job, 37 hours a week, at a plastics factory.

His application was approved.

In turn, Omaha resident Tanya Murph — who described herself as Marshall's aunt — applied with HHS to take care of Adonyae.

Her application was approved.

Murph proceeded to bill HHS the going rate — about $6 an hour — for watching Adonyae from 2:30 p.m. to 11:30 p.m. daily, sometimes six days a week.

For 18 months she billed the state for anywhere from 45 to 54 hours a week — bills that totaled as much as $1,300 a month.

Slight problem: Adonyae was in Colorado the entire time, HHS investigators say.

Marshall did not return phone calls seeking comment. Calls to Murph went unanswered. However, the two insisted to HHS investigators that they had cared for Adonyae in Omaha.

Adonyae's grandmother Beverly Burnett of Denver called that a “flat-out lie.”

In an interview from her home, Burnett said Marshall not only didn't have Adonyae, he didn't visit his daughter more than once in that time span.

Told that Marshall and Murph had said that Adonyae was in their care from April 2008 to October 2009, Burnett said: “Please. I had her the entire time. The schools know she was here. The courts know she was here. The judge knows she was here. I raised her.”

Court records show a Colorado juvenile court judge granted custody of Adonyae to Burnett in 2008. And school records show that Adonyae has been in Denver schools since turning 5 years old in 2008.

Adonyae was doing well in Burnett's home in 2009 — when Colorado state social services workers checked.

The same couldn't be said for Nebraska officials. For 18 months, HHS workers didn't go to the house to see if Adonyae was in the care of Marshall or Murph.

And they missed some possible tipoffs.

When Marshall renewed his application for government assistance in November 2008, he listed that he was paying $90 a month in child support through the Denver courts — a sign that Adonyae wasn't living with him.

Then in December 2008, Marshall was temporarily laid off from his job. Even so, Murph continued to bill the state for Adonyae's care, which caused an HHS worker to question both Marshall and Murph.

Marshall said he was spending 40 hours a week looking for a job; Murph said she had no idea that Marshall had lost his job.

Then came the biggest tip that something might be amiss. In May 2009, an anonymous caller phoned HHS to say that Adonyae resides “with her (grand)mother in Denver and always has.”

After the tip, Marshall and Murph continued to receive benefits for three months.

Their haul during the time it took HHS to investigate the tip? Marshall, about $1,000; Murph, more than $3,000.

HHS spokeswoman Marla Augustine said the delay in cutting off benefits probably occurred “because (HHS officials) were looking into it.”

Contact the writer:

444-1275, todd.cooper@owh.com

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