Fraud investigation is believing your lying eyes

Take a look at the actual 2019 OLA report McKenzie cites. This characterization is wrong in ways that matter.

The "50% fraud" claim? It comes from one investigator (Swanson) using what the OLA explicitly calls "a higher level view, a view that does not require the kind of proof needed in a criminal or administrative proceeding." His methodology? If kids are poorly supervised, "running from room to room while adult employees spend hours in hallways chatting".... he counts the entire payment as fraud. That's not "billing for phantom children" it's "I don't like how this daycare is run."

The OLA's actual finding: "We did not find evidence to substantiate the allegation that the level of CCAP fraud in Minnesota is $100 million annually." Proven fraud over several years was $5-6 million.

Terrorism? "We were unable to substantiate the allegation that individuals in Minnesota sent CCAP fraud money to a foreign country where a terrorist organization obtained and used the money." They checked with the U.S. Attorney's Office.. none of Minnesota's terrorism cases involved CCAP money.

McKenzie writes "beyond intellectually serious dispute" about claims the primary source he cites explicitly could not substantiate.

Meanwhile the president is posting videos of the Obamas as apes and calling Somalis "garbage", having federal prosecutors throwing out arbitrary $9 billion estimates in press conferences.

See for yourself: https://www.auditor.leg.state.mn.us/sreview/ccap.pdf

Patrick is too polite to mention it, but frauds work much better if the fraudsters are also fully integrated into the political machine of the people nominally investigating the fraud.

On Shirely, and the reaction: there's a markedly different valence to a fraud 'investigation' seeking to arrest, try, convict, and imprison _fraudsters_ vs one seeking (through a thin veil) to mar an entire community and bring about their violent dispossession at the hands of unaccountable little green men. It would not be an unreasonable person that strongly supports the former and opposes the latter.

> They will sometimes organize recruitment very openly, using the same channels you use for recruiting at any other time: open Facebook groups, Reddit threads, and similar. They will film TikTok videos flashing their ill-gotten gains, and explaining steps in order for how you, too, can get paid.

> As a fraud investigator, you are allowed and encouraged to read Facebook at work.

I tend to believe this, but it would be a lot more compelling with links to a case where Facebook/TikTok posts were useful evidence.

> Responsible actors in civil society have a mandate to aggressively detect and interdict fraud. If they do not, they cede the field to irresponsible demagogues. They will not be careful in their conclusions. They will not be gentle in their proposals. They will not carefully weigh consequences upon the innocent. But they will be telling a truth that the great and the good are not.

Leaving this to the conclusion does the piece a disservice. One can quibble (and it would be good to here) the extent to which the government isn't pursuing the sorts of fraud discussed, but this as a thesis makes clearer the argument throughout for earlier and more aggressive pursuit.

Instead of giving parents vouchers, that they then use at a fraudulent daycare, in exchange for a fake job, while they take care of their children at home, parents should just get money, so that they can stay home taking care of their children if they prefer that.

All I remember hearing about this is how creepy and racist it was to look for kids at a black-owned daycare. It was a scam the whole time?

Under "In which we briefly return to Minnesota":

> And I think journalism and civil society should do some genuine soul-searching on how we knew—knew—the state of that pond, but didn’t consider it particularly important or newsworthy until someone started fishing on camera.

In... the same section where he cites all of the evidence the government has put together against the fraudsters. What is the issue? That these investigations should have been more prominently featured in the mainstream news? Would that have helped or hurt investigations?

> Of course, as the New York Times very carefully wordsmithed recently:

>> Minnesota officials said in early January that the state conducted compliance checks at nine child-care centers after Mr. Shirley posted his video and found them “operating as expected,” although it had “ongoing investigations” at four of them. One of the centers, which Mr. Shirley singled out because it misspelled the word “Learning” on its sign, has since voluntarily closed.

> An inattentive reader might conclude from this paragraph that the Times disputes Shirley’s reporting.

The New York Times is literally quoting what the Minnesota officials said. What were they supposed to do, add on "but a kid on YouTube says differently"?

I don't think the serious response to Nick Shirley's "journalism" is that there was no fraud; rather, it's that he came into the situation with a thinly veiled agenda and fed his audience exactly what they wanted to hear. Did his video make it more or less likely that we'll be able to investigate and resolve the fraud situation in MN? I guess that depends on how serious you think the laughably corrupt Trump administration is, but the fact that they seized on this as an excuse to send in 3000 ICE agents is not exactly promising.

The reason that "the left" is rolling eyes at the fuss being made over this fraud is:

1. The fraud is in fact being investigated, people are being charged and convicted. Despite this, rightwing media institutions are acting as if fraud is being ignored and maybe even covered up and encouraged because

2. This is just another example of the decades long project by those who have lots of money and don't want to see it go to takes to paint social programs as a money-pipe from good hardworking people to fraud and waste.

He was able to show all the evidence David had. The evidence had to be leaked out of the government of MN because it was silent whistleblowers that had been turned down after doing internal investigations. The government of MN may be complicit in all of this. It could be that they were trying to be anti-racist, which is why a lot of the fraud is specifically being performed by Somalians. But it can also be pay for vote fraud - where the leaders of the Somalian communities tell everyone who to vote for, and they are doing this because Walz (or some other people) are shielding the daycares from being shut down.

There is literally nothing wrong with stating this, we ought not be political about this. There may also be conservatives being elevated from Fraud as well, all of it should be routed.

At this point it definitely warrants deep investigations, not more articles trying to destroy a 23 year old that went viral.

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Yeah, the fraud’s been around for a while and the Biden DoJ was investigating it. One of the guys got fingered trying to bribe a juror¹ but he stole half the bribe money.

The politicization of the issue means that Democratic Party aligned people continually flag any reference to the scam on HN though. If anyone else said that someone broke in and stole all the records from a daycare days after it was accused of fraud it would be considered a bald-faced lie but because of the political alignment (this is VP candidate Walz’s state) everyone is forced to pretend there’s no scam.

¹ Paradoxically the one honest juror who reported the bribe was removed from the case. No others reported any bribe which obviously must mean they received none.

> To the extent that Bits about Money has an editorial line on that controversy, it is this: if you fish in a pond known to have 50% blue fish, and pull out nine fish, you will appear to be a savant-like catcher of blue fish, and people claiming that it is unlikely you have identified a blue fish will swiftly be made to look like fools. But the interesting bit of the observation is, almost entirely, the base rate of the pond. And I think journalism and civil society should do some genuine soul-searching on how we knew—knew—the state of that pond, but didn’t consider it particularly important or newsworthy until someone started fishing on camera.

Does Patrick want to address the fact that this happened during school break and that Nick Shirley didn't prove much of anything?

Great article, ties in neatly with observations among many that fraud, grifting, and devolution of the social contract has escalated greatly since 2020.

Look, this is a mostly reasonable, if slightly vague, article about investigating fraud and mechanisms by which you do so.

What it lacks is any concrete suggestion as to what should change, beyond some vague allusions that perhaps racial/ethnic profiling should make a comeback.

The real problem here though is that the entire article ignores the duty[1] the government owes its citizens.

It's "fine"[2] if stripe or visa or whoever flips a coin and if it's tails they decide this person isn't allowed to be a customer of their company. The company loses any profit they might have made and life goes on.

It's considerably more problematic when the government refuses to serve a citizen (or even worse, levies an accusation).

There's some famous quotes about how many innocent people are appropriate to harm in the pursuit of the guilty but I'll leave those up to the reader.

[1] duty feels like too weak of a word here. Obligation? Requirement? The only reason the government even exists is to benefit the citizens.

[2] it becomes rapidly less fine when the company essentially has a monopoly over a system requires to participate in modern life, but that's a different topic...