Child Care Fraud Mastermind Convicted In L.A. County
Following three days of deliberations, jurors on Thursday convicted the mastermind behind a massive child care fraud ring that depleted the public treasury of more than $1.4 million.
According to the Los Angeles County District Attorney's Office this is believed to be the largest child care fraud case filed in the nation to date.
Deputy District Attorney Tamia Hope of the Public Assistance Fraud Division said Demetrius Eugene of Palmdale – a former employee of the Department of Incorporations within the California Secretary of State’s office – was convicted of five counts of grand theft and six counts of perjury. Jurors also found true an allegation that the defendant stole more than $200,000 in case No. BA333770.
Co-defendant Kmond Day, 36, was acquitted of all counts in this case.
Eugene, who was originally charged in four public assistance fraud cases filed in 2008, then proceeded to enter a guilty plea in his last pending consolidated case involving three of the original cases filed. The defendant pleaded to three counts of grand theft and admitted an allegation that he took more than $500,000.
The cumulative loss attributed to Eugene’s conduct is $1,404,070. The 40-year-old defendant was acquitted of a single count of grand theft.
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Los Angeles Superior Court Judge Melissa Widdifield said Eugene will be sentenced at 9 a.m. on Jan. 26, 2012, in Department 43 of the Foltz Criminal Justice Center. Defendant Eugene will be sentenced to 14 years in state prison and ordered to pay full restitution, the prosecutor said.
Eugene set up four home-based child care centers under the name Home Sweet Home Day Care Inc. with family members and friends listed as purported childcare providers for each business.
Eugene and his associates offered 38 welfare recipients monetary kickbacks, prompting these individuals to apply for subsidized childcare. Eugene and his cohorts falsified paperwork to create the illusion that these people were employed by Home Sweet Home Day Care as maintenance workers. But authorities believe very little legitimate childcare was provided nor were the parents employed.
During the criminal investigation, District Attorney investigators – funded by the Department of Public Social Services who work to combat public assistance fraud – found that most of the homes serving as childcare fronts were licensed for 14 children but were only large enough to accommodate six. Furthermore, investigators discovered that, in some instances, children who were allegedly being cared for by Home Sweet Home Day Care providers did not reside in the state.
The scheme was operated from an office at 2050 W. Florence Ave. in Los Angeles, where parents receiving aid signed attendance sheets and picked up kick-back checks.
Parents on the Home Sweet Home Day Care payroll – 70 percent of whom admitted to knowing about the scheme – received roughly $300 per child and were assigned titles based on the number of children reported as needing childcare. For instance, while one child earned parents the title of Maintenance Worker I, four or more children earned the parents the title of Supervising Maintenance Worker.