MILWAUKEE -- Wisconsin is trying to recover more than $8 million from roughly 300 child care providers shut down for cheating the taxpayer-subsidized Wisconsin Shares program, but gaps in the state's system for collecting restitution make it unlikely taxpayers will see full repayment anytime soon.
The Milwaukee Journal Sentinel reported Sunday (http://bit.ly/YA3zOH) the state's collections system involves three different agencies, and includes lax payment plans and passive pursuit of assets.
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The state Department of Children and Families hasn't documented or filed claims for all the stolen money. State prosecutors say they aren't equipped to hunt for hidden assets. And the Corrections Department leaves discretion to individual probation agents who don't systematically investigate offenders' assets.
In one case, the newspaper reported, a provider convicted of scamming $264,000 is repaying $42 a month. At that rate, it would take nearly 525 years to repay the money in full.
"I will admit ... one of the areas where we are weakest is asset recovery," said David Feiss, the Milwaukee County assistant district attorney handling most of the child care fraud cases. "It's not something we're geared to do." The district attorney's office can pursue assets if used to commit a crime, or if prosecutors can prove items were purchased with stolen money.
A task force was created in 2009 to crack down on child care fraud, but after about six months, investigations into the offenders' assets were dropped, Feiss said.
The failure to identify assets at the start makes it hard for other agencies to collect now.
After sentencing, the state Department of Corrections collects restitution. If an offender is in custody, a judge determines whether he or she will pay the standard 25 percent a month out of their prison fund, or wait to begin repayment until release.
Milwaukee County Circuit Judge David Hansher said judges don't usually know what means or assets offenders have.
"I have no power to check banks," Hansher said.
"We don't do credit checks. ... I have no idea what their assets are," he said. "They are probably living from paycheck to paycheck. ... They could have the money salted away, but there's no way to know."
Hansher said it's unlikely the public will recover more than 5 or 10 cents on the dollar.
Probation officers also determine how restitution is repaid but don't often have vast knowledge of financial crimes and offenders who commit them, said Larry Mahoney, a 34-year veteran of the Department of Corrections who retired last month.
"We have specialty units for sexual offenders and drug dealers, but not for financial cases," he said. "I don't think we're equipped to deal with them. ... We're used to street criminals."
Mahoney partly blames judges, saying they rarely order offenders into custody for not paying restitution -- mainly because offenders simply have to prove they've made a "good-faith effort."
Erin King, assistant regional chief in Milwaukee, said the restitution collection system is fine.
"The difficulty is the ability to pay. ... Paying back several hundreds of thousands of dollars would be difficult for any population," she said.
As of November, the Department of Corrections collected about $98,000 in restitution from criminals convicted of defrauding the child care program.