The good news from today’s big fraud case involving a ring controlling more than 30 for-profit day care centers that bribed and scammed their way into $18 million worth of federal day care funds is that they were tripped up when they tried to bribe the wrong city employees.
Although the straight-shooting city workers are unnamed in the criminal complaint unveiled today by Manhattan U.S. Attorney Preet Bharara and city investigations chief Rose Gill Hearn, the charges describe what happened when one of the 11 day care schemers arrested today showed up at the city’s Department of Health and Mental Hygiene on July 9. Lyudmila Grushko, a lead player in the Russian-speaking band of scamsters, came seeking approval to hike the number of kids her Sesame Street LMN Day Care Center in Brooklyn was allowed to serve.
The first by-the-book worker, dubbed “DOH Employee #1” in the complaint, told Grushko she was already maxed out as a result of her certificate of occupancy. Then Grushko and another Russian woman who accompanied her on the visit left the office. At this point, the complaint states:
“Employee #1 realized that Grushko had left behind an envelope for her. The envelope contained a box.” Inside the box was a ring. Just as Employee #1 was opening the box, her supervisor, DOH Employee #2 walked in. “Employee #2 called after Grushko; Grushko approached her, and she told Grushko that offering a ring to Employee #1 was inappropriate. Employee #2 said Grushko kept repeating ‘What size?’ and Employee #2 said she understood Grushko to believe that the issue was that the ring was the wrong size.”
Of course she did. Why else would anyone complain about being given a free piece of jewelry. The criminal complaint sketches out the booty that the day care ring — who called themselves “the Congregation” — bestowed on a different health department worker, who spilled the beans after being braced by city investigators.
Dionne Rivers-Ettu told agents that Liudmila Umarov — who was dubbed “the Day Care Queen” for her extensive connections — and an allegedly corrupt DOH supervisor named Aurora Villareal plied her with some fine loot: diamond earrings, white gold necklace with diamond pendant, one diamond hoop earring, a pair of gold hanging earrings with green stones, and a bracelet with multi-colored stones. There was also $5,000 in old-fashioned cash.
The day care ring specialized in some pretty sophisticated ways to inflate their monthly attendance logs of kids in their centers. A crooked Human Resources Administration employee, Leonid Gutnik, allegedly steered kids from homeless shelters the ring’s way; he also perfected a scheme to route the names and specs for day care assistance-eligible New Yorkers so that their kids’ names could be listed on the Congregation’s rosters, even though the children weren’t present.
DOI chief Hearn dubbed these never-shows “ghost children.” They give “a whole new meaning to children having imaginary friends,” she said.