They made their move before the crack of dawn, targeting child care centers in Minneapolis, St. Paul and Apple Valley. They seized computers and box loads of documents as part of a massive fraud investigation.
Agents from the FBI, Minnesota Bureau of Criminal Apprehension and Ramsey County Attorney's fraud unit participated in the raids, which coincidentally took place as the FOX 9 Investigators were looking into the very same business.
"It's not difficult to see a pattern of what's going on here," said one confidential source.
The FOX 9 Investigators spent three months digging through records, conducting surveillance and speaking with insiders who say "it's terrible how taxpayer funds are being misused" to the tune of tens of thousands of dollars a week.
"I think it's bigger than the state realizes," said another source with inside information.
Yasmin Ali is the owner of Deqo Family Centers. While giving a tour of her Apple Valley location she told an undercover Fox 9 producer that running a child care center is......
"a lot of work, and you have to make sure everything is following the rules," She went on to say "A lot of people that we work with are low-income families."
Ali told our producer that many of her customers are on assistance. They qualify to have the government pay for their kids child care.
They can get that help if they're working, training for a job, or hunting for one.
"I think its doing a disservice to the people that truly do need child care assistance."
says a DEQO employee we interviewed. She's one of four workers who have intimate knowledge of the operation who spoke with the Fox 9 Investigators.They've also shared information with government fraud investigators.
According to our sources, Deqo was actively recruiting women who's income level allows them to receive child care assistance and offered them jobs at the centers, some to watch their own children. Deqo bills the county for child care expenses while the moms are supposedly working.
Our informants say many of the jobs were not legitimate, that only two percent of the moms actually did some kind of work.
"Sometimes they would come in, sign in their children, sign themselves in and go grocery shopping."
Our sources say the more children a woman had to enroll in child care, the more she'd be paid per hour, even though she had the same job title as all the other moms.
"The reason for that is: Then they had more assistance for each of the families," one source said.
On numerous occasions, the FOX 9 Investigators witnessed many women coming to the centers with four, five or more children in tow.
"Her value was in how many children she had," the insider said.
According to government records, Deqo's Minneapolis and St. Paul centers were each eligible to receive nearly $50,000 in child care assistance funds every two weeks, totaling over $2 million a year.
"They're making a ton of money," one employee confided.
The employees who spoke with the FOX 9 Investigators said time sheets that were submitted to the county inflated the hours the mothers actually spent in the centers too, allowing the company to bill the government for the maximum child care time.
State inspection reports show Deqo had previously been cited for a number of logistical problems -- including a lack of accurate record-keeping regarding staff hours. The company was also fined for failing to conduct background checks on employees, and the state also ordered them to provide documented proof staff members had received mandated training.
"While I was there, I saw falsifying documentation," one employee recalled, explaining that the company falsely told the state employees had been trained when they had not been.
FOX 9 Investigator Jeff Baillon stopped by Deqo's Apple Valley Office to speak with Yasmin Ali. She wouldn't go on camera, but their conversation was recorded.
When Baillon informed her of the accusations that she had falsified records to get child care funds, Ali said, "That is not true, but as I say, I'm not going to have any comment right now."
FOX 9 News obtained a contract which shows that, in addition to all the funding for child care, Deqo was also receiving public money to pay for meals. The Minneapolis center alone got nearly $90,000 for food in its first year of operation -- and the place that supplied the catering is run by Ali's brothers.
A copy of the catering contract is signed by Adarus Ali. In 2009, Adarus Ali pled guilty to perjury after the Justice Department accused him of lying to a federal Grand Jury when he testified that he knew nothing about the recruitment of Somali men in Minnesota by a terrorist group known for fighting in their homeland.
In reality, Adarus Ali sat in on a discussion and even drove some of the men to Twin Cities International so they could board their flights to Somalia. He did not respond to numerous requests for an interview.
Recently, the state rejected a plan by Deqo to use even more public funds to allow Ali's restaurant to provide catering to additional child care centers. Regulators said Deqo's proposal was double the normal cost and was full of inaccuracies and incomplete documents.
Fraud investigators are now sorting through thousands of records and computer files taken during the raids, but no charges have been filed so far.
The Fox 9 Investigators tried again to interview Deqo's owner Yasmin Ali. When our camera's showed up at her Minneapolis office she closed the door and said "I'm not talking to anybody."
The criminal investigation is being spearheaded by the Ramsey County Attorney's Office, but because it is an ongoing investigation, they declined to discuss the case or comment on the findings in this story.