KC Daycare Center owner, Director Indicted for $556,000 Fraud Scheme

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the owner and the director of a Kansas City, Mo., day care center were indicted by a federal grand jury today for their roles in a conspiracy to file false attendance reports in order to fraudulently receive as much as $556,000 in federal benefits.

Today’s indictment is the result of a nationwide sweep that targeted childcare center fraud schemes. The national law enforcement operation in Missouri and six other states was the result of separate, but related, federal investigations into childcare center fraud that resulted in a loss of more than $1 million to the government.

Sharif Karie, 39, of Olathe, Kan., and Sheri Beamon, 46, of Kansas City, Mo., were charged in an eight-count indictment returned by a federal grand jury in Kansas City, Mo. Karie, a naturalized U.S. citizen from Somalia, is the owner and CEO of a day care center established under two businesses and two names for the same location, with the same key employees: KARIE Day Care Center, LLC, and Tima Child Care Center, LLC, at 1019 Admiral Blvd., Kansas City, Mo. Beamon is the director of KARIE/Tima Childcare Center.

Today’s indictment alleges that Karie and Beamon participated in a conspiracy from October 2013 to June 2016 to submit false claims to the government. They allegedly billed a federal grant program to provide childcare services to low-income families for more hours and children than actually attended the daycare center. At least $100,000 and as much as $556,000 was fraudulently billed in connection with this scheme, the indictment says.

The Child Care and Development Fund provides daycare subsidies for low-income families where the parents are employed or engaged in job training. Providers contract with the Children’s Division of the Missouri Department of Health and Senior Services and submit claims electronically.

According to today’s indictment, pole cameras were installed near the day care center and captured footage of the entrances and exits of the building during two time periods in 2015 and in 2016. Timesheets and billing records were reviewed and compared to the children seen on the pole cameras being dropped off and picked up from the daycare center during that time. There were significant discrepancies, the indictment says, between the timesheets, claims submitted and the pole camera footage.

In addition to the conspiracy, Karie and Beamon are charged together in one count of theft of public money, three counts of aiding and abetting each other to commit aggravated identity theft and three counts of wire fraud. Today’s indictment also contains a forfeiture allegation, which would require Karie and Beamon to forfeit to the government any property derived from the proceeds of the alleged scheme, including at least $100,000 and as much as $556,000.

According to the indictment, the state conducted a compliance review of the daycare center’s billing for May 2014 and July 2014. The review found several attendance records missing. The review also identified 14 out of the 15 families with children at the center who had a parent employed there. With only two classrooms, the indictment says, it is improbable that parents were not caring for their own children. One of these parents reported that her job was contingent on having all of her children placed in care at KARIE Day Care Center so her child care would be paid by the state. This same 2014 audit found several discrepancies on the time sheets submitted to the state.

Subsequent unannounced inspections at KARIE Day Care Center found the facility in violation of state regulations pertaining to child care licensing rules, the indictment says, including health and safety, staff ratios and the maintaining of attendance records. Each of the inspections resulted in violation findings.

Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the U.S. Department of Health and Human Services – Office of Inspector General, Office of Investigations, the FBI, the Missouri Department of Social Services – Division of Legal Services Investigations and the Kansas City, Mo., Police Department.