Not even FBI raid halted state aid to child-care centerA Menomonee Falls couple whose child-care center has been under criminal investigation for suspected fraud since at least January continued to collect money from the state's taxpayer-supported Wisconsin Shares program -- even getting an $18,000 check that was issued the day after the FBI raided the center.
By: John Diedrich/Milwaukee Journal Sentinel, Superior Telegram
A Menomonee Falls couple whose child-care center has been under criminal investigation for suspected fraud since at least January continued to collect money from the state's taxpayer-supported Wisconsin Shares program -- even getting an $18,000 check that was issued the day after the FBI raided the center.
The state cut off funding last Wednesday, the same day the Journal Sentinel reported the raid. But by then the state had already paid Executive Kids Early Childhood & Learning Center $130,000 this year alone.
State officials said law enforcement authorities asked them to allow the center to continue operating during the initial portion of the investigation. However, in the five years since its opening, Executive Kids has amassed a lengthy history of program violations while reaping more than $2 million in public money -- all after its operators, Duane and Shontina Gladney, declared bankruptcy in federal court, records show.
The Gladneys previously ran a center in West Allis where 2-year-old Asia Jones died when she was left in a sweltering van in 2005. After the child's death, the state yanked Shontina Gladney's license for the Come and Grow With Me center.
Just weeks later, Duane Gladney opened Executive Kids in Milwaukee. The search warrant says Shontina Gladney helped operate the center.
Duane Gladney declined to comment, referring questions to his attorney, who did not return calls.Even with funding suspended on suspicion of fraud, Gladney continued to operate the center late last week.
The center is also linked to day care provider Latasha Jackson, who received nearly $3 million from the program. Jackson bought a Jaguar convertible and built a mansion in Menomonee Falls with an indoor swimming pool and indoor basketball court -- while regulators ignored red flags for 10 years that she could be cheating the system.
Jackson is also under criminal investigation for suspected fraud.
Her story was part of the ongoing "Cashing in on Kids" investigation, which found millions in taxpayer dollars squandered by parents and providers scamming the $350 million program. It also discovered hundreds of criminals working in the business, with some of Milwaukee's biggest crime bosses having ties to centers.
The series sparked taxpayer outrage and led to a sweeping crackdown on sketchy child-care providers.
State regulators have since cut public funding to about 170 child-care providers suspected of cheating the program. About two dozen have been reinstated.
A federal, state and local anti-fraud task force was formed last fall. Six providers have been charged in Milwaukee County Circuit Court and as many as 75 criminal investigations are under way statewide, including those of Executive Kids and Jackson's business.
Jackson is friends with Shontina Gladney, according to court documents. When the state temporarily suspended payment to Jackson's center in 2007, she took children's files to Executive Kids, which started billing for them, though workers say the children didn't attend, according to court records.
The search warrant says Jackson received $30,000 from Executive Kids.
On April 26, the FBI raided Executive Kids as part of an ongoing criminal fraud investigation into that center and others, seizing computers, attendance reports and other records.
The next day the state issued an $18,147 check to Executive Kids for service from the first two weeks of April, according to Erika Monroe-Kane, spokeswoman for the state Department of Children and Families.
Monroe-Kane said law enforcement since gave the department "the green light" to suspend Executive Kids last Wednesday, and the center will receive no more payments.
"The moment we were given the sign by our law enforcement partners, we immediately suspended this provider," she said.
For investigative reasons, law enforcement may ask the department not to cut off a center even when there is enough evidence to do so, said Milwaukee County Assistant District Attorney David Feiss. The FBI searched Jackson's center after it was suspended by the state.
"There are certain things we can get if we allow the center to continue to operate," Feiss said. "The risk is, there will be an outflow of fraudulent dollars. . . . We have to try to balance that out. We have to try to build the strongest criminal case, vs. doing something more immediate."
Problems with day care centers operated by the Gladneys surfaced publicly in June 2005. That was when Asia Jones was attending Shontina Gladney's Come and Grow With Me Learning and Arts Center in the 7600 block of W. Becher St. in West Allis. Asia was picked up by a van for the center at 7 a.m. on June 9.
But eight hours later, when her mother, Nicole Jones, came to pick up Asia, workers couldn't find her.
They found Asia had been left in the back of a hot day care van. The toddler was already dead when paramedics arrived.
The van driver, Ronald Turkvan, was arrested but wasn't charged. Milwaukee County District Attorney E. Michael McCann said state law required him to prove "conscious disregard." Legislators later changed state law to allow charges in such cases.
Less than a month after Asia's death, the state revoked Shontina Gladney's child-care license. The investigation found she and Turkvan violated several state rules and also determined Gladney did not follow her own safety rules.
At that time, Duane Gladney -- Shontina Gladney's husband -- was operating a day care called Wee World on Milwaukee's south side, Monroe-Kane said. A few weeks after his wife's license was revoked, Duane Gladney was issued a license to open Executive Kids in the 2000 block of N. King Drive, records show.
Monroe-Kane said Duane Gladney was warned that his wife and Turkvan, the driver who left Asia in the van, could not work for him. State law required that Shontina Gladney stay out of the day care business for two years, she said.
The FBI affidavit said that Shontina Gladney helped operate Executive Kids, but does not say when.
Monroe-Kane said there are no records showing Shontina Gladney worked at Executive Kids, such as pay stubs or a background check done on all employees.
"We made it explicitly clear that she should have no role," Monroe-Kane said. "Duane Gladney never gave any indication that Shontina was involved in that business."
In June 2007, Asia's family sued Shontina and Duane Gladney, their business and others, including Telisa Hopgood, who had worked at the West Allis center and would later become director of Executive Kids.
But the Gladneys were dismissed from the case because they had filed for bankruptcy in October 2005 -- the year Asia died and shortly after Duane Gladney opened Executive Kids, said Laurence Fehring, attorney for Asia's family.
"The only thing I have learned was their recordkeeping was extremely lax," Fehring said of the Gladneys' operation of Come and Grow with Me.
Documents from bankruptcy court say the Gladneys claimed to be at least $50,000 in debt in 2005. Among their assets was a home in Menomonee Falls currently valued at $425,000, according to online property records.
Jackson also lived in Menomonee Falls until her mansion burned down in a December fire that investigators are calling suspicious. An investigation into the fire continues, according to the Wisconsin Department of Justice.
During the bankruptcy, the Gladneys reported taking in $47,374 in state subsidies for Executive Kids over six weeks of 2005.
But they claimed to have spent nearly $67,000 on the business in the same period, records show. Included in that figure is $24,828 in salaries. Most employees' names are not listed.
Assistant U.S. Attorney Mel Johnson, who is heading up the federal investigation into day care fraud, said he is aware of the Gladneys' bankruptcy but declined further comment.
Johnson said the federal investigation into possible fraud at Executive Kids and Jackson's centers continues. No charges are imminent, he said.
Record of violations
State regulators found numerous violations at Executive Kids since its opening in 2005.
The state's online records show five inspections between July 2008 and this past January. There were earlier inspections that are not listed on the state's Web site, Monroe-Kane said. More detailed information on those earlier inspections and the violations listed were not available last week.
In July 2008, inspectors cited Executive Kids with failing to report an injury and hazards, both inside and outside, the online reports show.
Over three inspections in 2009, inspectors cited the day care for 48 violations, including failing to keep accurate attendance logs. The state issued an order against the day care.
In January, the state was back, found a violation relating to a license application and issued a forfeiture order, records show.
Meanwhile, the state was documenting obvious signs of fraud. In cutting off Executive Kids last week, the state said the center billed for children who weren't there, overcharged for hours on the children who were there and paid employees under the table to bring their children to the center, the suspension summary said. Workers told the FBI they were paid to let the Gladneys bill for their children, but they often weren't at the center, according to the search warrant.
The state also said Executive Kids let a revoked provider -- likely Jackson -- use the center to bill for 40 children who never attended.
Shontina Gladney -- who was banned from the program after Asia Jones died -- admitted to state investigators that Executive Kids billed for children who were not attending, the state said. She said the center only began to bill for the center's true attendance in January.
By then law enforcement was zeroing in on Executive Kids, but the money would keep flowing for months.
Raquel Rutledge of the Journal Sentinel staff contributed to this report.
Copyright (c) 2010, Milwaukee Journal Sentinel/Distributed by McClatchy-Tribune Information Services.