Dems Catch Child Care Funds Flying to Overseas Computers, Shut Off Tracking to Keep Heist Alive [WATCH]

Minnesota State Representative Krista Knudsen said testimony during a recent fraud committee hearing raised concerns about how the Department of Human Services has tracked funds leaving the state.

Knudsen said the issue came up as lawmakers reviewed ongoing fraud cases tied to state programs. She told viewers, “I’m Minnesota State Representative, Christa Knutson, every time we turn around, it’s just more and more fraud scandals in our state.”

She said DHS acknowledged gaps in tracking where funds were being sent. “Today, in the fraud committee, the Department of Human Services testified that they haven’t been tracking the IP addresses of money that’s being literally flown out of our state,” Knudsen said.

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She added, “and where it’s going.”

Knudsen said DHS briefly activated tracking but did not keep it in place.

“They did turn on that reporting for two weeks, and they found that, yes, a lot of those IP addresses were tied to overseas computers.”

She then stated, “And then they quickly shut it off after just two weeks of seeing where this money is actually going.”

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During the hearing, Scott Stillman outlined how the system used by DHS handled billing and why investigators encountered difficulties.

“DHS billed or paid or paid these daycares through, I believe, was the me to MEC squared billing system,” Stillman said.

He explained that when investigators tried to identify activity, “we discovered when we wanted to find out who was billing and where they were billing from, that the MEC squared system was not designed to to include IP numbers.”

Stillman described the lack of tracking as a significant gap. “It’s a major oversight,” he said.

He compared it to a basic failure in system design, adding, “It’d be like buying a brand new car that didn’t have brakes.”

He said the absence of IP data meant investigators could not determine key details. “we weren’t able to tell who was billing, when they were billing, or where they were billing from,” Stillman said.

Stillman said he and others sought help from the state’s IT department. “We said, We need these IP addresses,” he explained.

After discussions, a temporary solution was implemented. “a gentleman over there, very smart person, set up a temporary IP trap,” Stillman said.

He described what that effort uncovered. “he was able to trap the IP numbers,” Stillman said.

He added, “and he saw people from Japan logging into our state system to bill for c cap.” He noted, “that’s all documented, and evidence is at the DHS lab.”

Stillman said the lack of built-in tracking limited legal options in at least one case. “we suspected that lady had ties to terrorism,” he said.

He explained, “we could only get her on wire fraud.”

He added, “we couldn’t get her on anything more from that, because the system wasn’t designed to detect fraud.”

State Representative Kristin Robbins asked about the duration of the temporary tracking system. “So do you know if the DHS system, that temporary trap was only I think, up from my reading a couple weeks,” Robbins said.

“Two weeks,” Stillman replied.

Robbins then asked whether DHS had since implemented permanent tracking capability. “So does DHS now have the capability to track IP addresses?” she asked.

“I do not know,” Stillman said. He added, “by the time I left, I was told no.”

He also said, “but what’s happened in the last seven, eight years? I don’t know.”

Robbins questioned why the system lacked a standard feature.

“So why would the system be set up without that ability, when it’s kind of standard on most computers?” she asked.

“I would be hesitant to give an answer to that,” Stillman said.

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