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Fraud allegations and the question of intent

Daycare is seldom a word used in connection with the word "fraud." After all, in St. Louis and across the country, daycare calls to mind images of fresh-faced kids and providers who generally enjoy being around them.

Daycare is certainly not a word often used in connection with the word fraud. Yet in current Missouri case, an audit indicated that daycare centers around the state may have engaged in fraudulent practices in claiming certain federal funds.

According to a report by the Missouri state auditor, the amount of money involved may be in excess of $300,000. The money was related to costs for children who left the program. In the St. Louis area, there were six daycare centers that received a cumulative total of $40,000 in doubtful reimbursement claims.

It is far too soon, however, to be making allegations of any criminal fraud. State auditor Tom Schweich noted that much depends on the specific intentions of the people involved in administering the financial aspects of particular daycare programs.

For one thing, federal reimbursement programs are often notoriously complicated. It is therefore quite possible that program administrators didn't really understand what the rules were in claiming federal funds. It is a question of intent, and intent is a key part of most types of criminal charges. If the apparent over-billing was not deliberate, then fraud charges would not be in order.

To be sure, it would be quite different if there were evidence that someone has intentionally over-billed the federal government. Our point is that a fraud charge is not appropriate if over-billing was merely inadvertent.

Source: "Auditor: No Federal Investigation Yet Into Daycare Fraud," KMOX, 3-25-13

To learn more about our practice, please visit our page on white-collar crime defense.

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