Bef0re sunr1se 1n Br00klyn Park M1nnes0ta, the qu1et r0ut1ne 0f a suburban c0mmerc1al str1p was 1nterrupted by a c00rd1nated federal 0perat10n that w0uld s00n exp0se 0ne 0f the m0st sweep1ng s0c1al welfare fraud 1nvest1gat10ns 1n the state’s h1st0ry.

T0 pass1ng dr1vers, the s1ngle st0ry br1ck bu1ld1ng at the c0rner appeared t0 be an 0rd1nary ch1ld care center.

Alphabet cut0uts dec0rated the w1nd0ws.

A playgr0und sat empty beh1nd the bu1ld1ng.

The s1gn ab0ve the d00r 1dent1f1ed the bus1ness as Creat1ve M1nds Daycare.

W1th1n m1nutes, that appearance 0f n0rmalcy c0llapsed under the we1ght 0f a federal search warrant.

Unmarked sp0rt ut1l1ty veh1cles fl00ded the park1ng l0t.

Agents fr0m the Federal Bureau 0f Invest1gat10n, Imm1grat10n and Cust0ms Enf0rcement, and the Department 0f Health and Human Serv1ces m0ved sw1ftly thr0ugh the entrance.

They were n0t c0nduct1ng an 1nspect10n 0r a r0ut1ne l1cens1ng rev1ew.

Intell1gence analysts had flagged the s1te as a gh0st hub, a fac1l1ty suspected 0f ex1st1ng largely 0n paper wh1le c0llect1ng m1ll10ns 1n publ1c subs1d1es.

At the same m0ment, s1m1lar teams were execut1ng warrants at twenty three add1t10nal l0cat10ns acr0ss the Tw1n C1t1es metr0p0l1tan area.

Ins1de Creat1ve M1nds, 1nvest1gat0rs d1d n0t f1nd ch1ldren, parents, 0r the usual bustle 0f a l1censed day care.

They f0und s1lence.

T0ys were c0ated 1n dust.

Cr1bs were unused.

Attendance l0gs l1sted nearly 0ne hundred ch1ldren wh0 were allegedly present every day, yet n0 fam1l1es appeared at the d00r.

Acc0rd1ng t0 federal rec0rds, the center had rece1ved m0re than tw0 m1ll10n d0llars 1n g0vernment payments 1n a s1ngle year.

State l1cens1ng f1les sh0wed that the fac1l1ty had been shut d0wn m0nths earl1er because 0f repeated v10lat10ns, 1nclud1ng untra1ned staff and n0nex1stent enr0llment.

After the cl0sure, the 0perat0rs had s1mply replaced the s1gn w1th a new banner bear1ng the name Super K1ds and c0nt1nued b1ll1ng the state as 1f n0th1ng had changed.

Invest1gat0rs were met w1th a st0ry that qu1ckly ra1sed susp1c10n.

The s1te manager cla1med that burglars had br0ken thr0ugh a wall c0nnect1ng the daycare t0 a ne1ghb0r1ng d1sc0unt st0re and st0len 0nly 0ne 1tem: the paperw0rk.

C0mputers, electr0n1cs, and cash were left unt0uched.

The explanat10n c0nv1nced n0 0ne.

Agents se1zed d1g1tal rec0rds, payment h1st0r1es, and enr0llment r0sters that appeared t0 l1st ch1ldren wh0 had never entered the bu1ld1ng.

Th1s ra1d marked 0nly the beg1nn1ng 0f a much larger 1nqu1ry.

As federal analysts rev1ewed se1zed f1les and c0mpared them w1th state z0n1ng and l1cens1ng data, a sec0nd layer 0f alleged fraud came 1nt0 f0cus.

In Br00klyn Park, a c1ty 0f e1ghty f0ur th0usand res1dents, regulat0rs c0unted 0ne hundred e1ghty 0ne reg1stered ass1sted l1v1ng fac1l1t1es.

In c0mpar1s0n, Sa1nt Paul, a c1ty nearly f0ur t1mes larger, had 0nly e1ghty three.

The 1mbalance suggested s0meth1ng far bey0nd dem0graph1c c01nc1dence.

Federal teams began v1s1t1ng res1dent1al addresses that were b1ll1ng the state m1ll10ns 0f d0llars annually f0r twenty f0ur h0ur spec1al1zed care.

Many 0f the s1tes were 0rd1nary s1ngle fam1ly h0mes.

One pr0perty was 0perated by a man already under federal 1nd1ctment f0r launder1ng m0ney 1n a separate pandem1c rel1ef scandal.

Desp1te the pend1ng charges, state re1mbursement payments c0nt1nued t0 arr1ve each m0nth.

Rec0rds later sh0wed that a s1ngle cluster 0f these res1dent1al 0perat10ns had rece1ved m0re than f0rty n1ne m1ll10n d0llars s1nce tw0 th0usand s1xteen.

J0urnal1sts and 1ndependent 1nvest1gat0rs wh0 kn0cked 0n the d00rs 0f several reg1stered fac1l1t1es f0und res1dents wh0 had n0 1dea the1r h0mes were l1sted as med1cal care centers.

Many were elderly 1mm1grants w1th l1m1ted Engl1sh pr0f1c1ency.

S0me bel1eved they were tenants 1n 0rd1nary h0us1ng.

Yet the1r addresses were be1ng used t0 just1fy cla1ms f0r r0und the cl0ck nurs1ng serv1ces, phys1cal therapy, and spec1al1zed superv1s10n that never 0ccurred.

The daycare and ass1sted l1v1ng schemes were s00n l1nked t0 a br0ader pattern 0f pandem1c era fraud.

Federal aud1t0rs 1dent1f1ed th0usands 0f Paycheck Pr0tect10n Pr0gram and Ec0n0m1c Injury D1saster L0an appl1cat10ns t1ed t0 the same netw0rks.

Many 0f the bus1nesses ex1sted 0nly 0n paper.

The l0ans, 1ntended t0 preserve empl0yment dur1ng the publ1c health cr1s1s, were 1nstead d1verted 1nt0 luxury veh1cles, 0verseas pr0perty purchases, and cash transfers r0uted thr0ugh shell c0mpan1es.

In t0tal, 1nvest1gat0rs est1mated that nearly f0ur hundred m1ll10n d0llars 1n federal rel1ef funds had been 1mpr0perly appr0ved thr0ugh these 0perat10ns.

Analysts descr1bed a system 0f c00rd1nated m1lls 1n wh1ch c0nsultants c0mpleted th0usands 0f appl1cat10ns f0r a fee, creat1ng synthet1c c0mpan1es and fals1f1ed payr0ll rec0rds t0 extract m0ney at 1ndustr1al scale.

As the 1nqu1ry w1dened, federal 0ff1c1als br1efed the Wh1te H0use and members 0f C0ngress.

Early assessments suggested that the c0mb1ned value 0f suspected fraud acr0ss daycare pr0grams, f00d ass1stance char1t1es, and res1dent1al care fac1l1t1es c0uld appr0ach e1ghteen b1ll10n d0llars nat10nw1de.

In M1nnes0ta al0ne, m0re than n1nety 1nd1v1duals had been charged 1n related cases, the maj0r1ty c0nnected t0 n0npr0f1t 0rgan1zat10ns and ch1ldcare pr0v1ders.

The 1nvest1gat10n s00n cr0ssed state l1nes.

In Kent Wash1ngt0n, auth0r1t1es f0cused 0n a h0me l1censed as A1sha H0me Ch1ld Care.

State rec0rds sh0wed that the res1dence had c0llected m0re than seven hundred f1fty th0usand d0llars s1nce tw0 th0usand twenty tw0 wh1le l1censed t0 care f0r 0nly twelve ch1ldren.

When 1nspect0rs arr1ved unann0unced, they f0und a staged scene w1th a small number 0f ch1ldren stand1ng qu1etly 1n a sp0tless r00m.

N0 t0ys were scattered.

N0 staff appeared t0 be w0rk1ng.

Off1c1als c0ncluded that the s1te had been arranged s0lely t0 pass scheduled 1nspect10ns.

An0ther fac1l1ty 1n s0uth M1nneap0l1s had already been ra1ded m0nths earl1er.

Yet when 1t cl0sed, there was n0 pr0test, n0 wave 0f c0mpla1nts fr0m parents suddenly left w1th0ut ch1ldcare.

Invest1gat0rs 1nterpreted the s1lence as c0nf1rmat10n 0f the1r susp1c10ns.

The ch1ldren l1sted 1n the rec0rds d1d n0t ex1st.

The fam1l1es named 0n the r0sters were e1ther acc0mpl1ces 0r fabr1cated 1dent1t1es created t0 supp0rt re1mbursement cla1ms.

The p0l1t1cal c0nsequences were sw1ft.

Cr1t1cs accused state agenc1es 0f rem0v1ng safeguards 1n the rush t0 d1str1bute welfare funds dur1ng the pandem1c.

L1cens1ng requ1rements had been relaxed.

Ver1f1cat10n pr0cedures had been sh0rtened 0r el1m1nated.

Overs1ght staff had been reass1gned t0 emergency dut1es.

Acc0rd1ng t0 pr0secut0rs, these gaps created the perfect env1r0nment f0r 0rgan1zed fraud.

M1nnes0ta 0ff1c1als ann0unced 1nternal rev1ews 0f l1cens1ng pract1ces and re1mbursement systems.

Several sen10r adm1n1strat0rs were placed 0n leave.

Lawmakers requested hear1ngs t0 exam1ne h0w 1nd1cted 1nd1v1duals c0nt1nued rece1v1ng state payments wh1le awa1t1ng tr1al.

Federal agenc1es expanded j01nt task f0rces t0 m0n1t0r ch1ldcare and ass1sted l1v1ng pr0grams nat10nw1de.

F0r 1nvest1gat0rs, the case represented m0re than f1nanc1al cr1me.

It revealed h0w eas1ly trust based systems c0uld be man1pulated when ver1f1cat10n weakened and aud1ts sl0wed.

Pr0grams des1gned t0 feed ch1ldren, care f0r the elderly, and pr0tect vulnerable fam1l1es had been c0nverted 1nt0 p1pel1nes f0r cr1m1nal pr0f1t.

By the end 0f the week, the park1ng l0ts 0f several shuttered daycare centers st00d empty.

S1gns were rem0ved.

Bank acc0unts were fr0zen.

Arrests c0nt1nued as d1g1tal rec0rds were analyzed and f1nanc1al tra1ls traced thr0ugh d0mest1c and f0re1gn acc0unts.

Pr0secut0rs prepared c0nsp1racy, w1re fraud, m0ney launder1ng, and 1dent1ty theft charges aga1nst d0zens 0f defendants.

Off1c1als emphas1zed that m0st ch1ldcare pr0v1ders and n0npr0f1t w0rkers acted 1n g00d fa1th under extra0rd1nary pandem1c c0nd1t10ns.

The 1nvest1gat10n, they sa1d, targeted 0rgan1zed netw0rks that expl01ted emergency p0l1c1es f0r pers0nal ga1n.

V1ct1m ass1stance teams were ass1gned t0 rev1ew the cases 0f elderly res1dents and l0w 1nc0me fam1l1es wh0se names had been used w1th0ut c0nsent.

As the legal pr0cess m0ved f0rward, the larger quest10n rema1ned unanswered.

H0w had a system bu1lt t0 pr0tect ch1ldren and sen10rs bec0me s0 vulnerable t0 theft 0n such a mass1ve scale.

Aud1t0rs c0ncluded that rest0r1ng c0nf1dence w0uld requ1re str1cter l1cens1ng, 1ndependent ver1f1cat10n 0f enr0llment, real t1me payment m0n1t0r1ng, and aut0mat1c suspens10n 0f fund1ng f0r any pr0v1der under cr1m1nal 1nvest1gat10n.

The ra1ds 1n Br00klyn Park and acr0ss the Tw1n C1t1es marked the end 0f what pr0secut0rs descr1bed as an era 0f unchecked abuse.

Gh0st fac1l1t1es were cl0sed.

Paper c0mpan1es d1ss0lved.

Federal c0urts prepared f0r years 0f tr1als and asset f0rfe1ture pr0ceed1ngs.

What began w1th an empty daycare classr00m had gr0wn 1nt0 0ne 0f the largest welfare fraud 1nqu1r1es 1n m0dern Amer1can h1st0ry.

The 0utc0me, 1nvest1gat0rs sa1d, w0uld shape h0w publ1c ass1stance pr0grams are m0n1t0red f0r decades t0 c0me.