Palmdale man gets 14 years for massive public assistance fraud, child-care scam

LOS ANGELES – A former state employee convicted of masterminding a massive child-care scam was sentenced Friday to 14 years in state prison and ordered to make full restitution of more than $1.4 million, the District Attorney’s Office announced.

Demetrius Eugene, 40, of Palmdale was sentenced by Los Angeles Superior Court Judge Melissa Widdifield.

A jury in December convicted Eugene, a former state Department of Incorporations employee, of five counts of grand theft and six counts of perjury. Jurors also found true an allegation that the 40-year-old stole more than $200,000.

Eugene pleaded guilty in a separate case to three counts of grand theft and admitted an allegation that he took more than $500,000. He tried to withdraw that plea Friday, but the judge denied his motion before sentencing him, according to Deputy District Attorney Tamia Hope of the Public Assistance Fraud Division.

Hope said Judge Widdifield ordered Eugene to make full restitution for both cases, not to exceed $1,469,895.

Eugene set up four home-based child care centers under the name Home Sweet Home Day Care Inc. with family members and friends listed as purported childcare providers for each business.

Eugene and his associates offered monetary kickbacks to 38 welfare recipients, who then applied for subsidized childcare. Eugene and his cohorts falsified paperwork that the people were employed by Home Sweet Home Day Care as maintenance workers. But authorities believe little legitimate childcare was provided nor were the parents employed.

The scheme was operated from an office at 2050 W. Florence Ave. in Los Angeles, where parents receiving aid signed attendance sheets and picked up kick-back checks.

Parents on the Home Sweet Home Day Care payroll – 70 percent of whom admitted to knowing about the scheme – received roughly $300 per child and were assigned titles based on the number of children reported as needing childcare. For instance, while one child earned parents the title of Maintenance Worker I, four or more children earned the parents the title of Supervising Maintenance Worker.

During the criminal investigation, District Attorney investigators found that most of the homes serving as childcare fronts were licensed for 14 children but were only large enough to accommodate six. Investigators also discovered that, in some instances, children who were allegedly being cared for by Home Sweet Home Day Care providers did not live in the state.

This is believed to be the largest child care fraud case filed in the nation to date.

(Information via the Los Angeles District Attorney’s Office.)

  2 comments for “Palmdale man gets 14 years for massive public assistance fraud, child-care scam

  1. Gladdis
    April 7, 2012 at 1:50 am

    If the licensing person appears to be good friends with the daycare provider, who does a concerned citizen report this same type of crime to, if you know it is happening?

    • Quigley
      April 7, 2012 at 1:15 pm

      All crooks involved who collected one of these bogus checks should be terminated for life from receiving any welfare, food stamps, and let’s not forget section 8. So tired of all the abusers!

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