Wis. official blames loophole for alleged fraud

MADISON, Wis. (AP) - A Middleton foster care company rolled up more than $6 million in inappropriate charges because a loophole that has since been closed, a state official testified Thursday.

Children and Families Secretary Eloise Anderson told a Senate committee that the company, Community Care Resources Inc., was not required to submit annual expense reports to the state before 2010.

A law passed that year let the way for the state assign auditors to monitor providers' expenses and determine rates, and the issues at Community Care were eventually uncovered after a long review that began in 2011.

A department audit accused Community Care of improper charges from 2009 to 2011, with the money lavished on home renovations, travel and cars. It also questioned salaries of more than $1 million paid to owners Dan and Mary Simon over three years.

The company's license was revoked in January.

Anderson's department has asked the money be repaid by next Friday, and warned that it has contacted the Department of Justice about the case.

In a letter addressed to the committee, Community Care attorney David Schwartz said the Simons were innocent. They are appealing the revocation of their license. Neither the Simons nor Schwartz attended Thursday's hearing.

Anderson said her department has set a goal of 50 fiscal reviews each year, most of them on foster care agencies. She said the task is challenging due to limited staff size.

In the past two years, Anderson said the department has revoked licenses for three other providers, a group home and two child licensing agencies.