"Troubling" Fraud in NY's Special Education Preschools

The front page of today’s New York Times features an investigation of fraud within NY’s $2 billion/year preschool special education program, which seems largely unregulated. The investigation focused on one Queens provider, Cheon H. Park, who created a company that in 2011-2012 billed the city and state for more than $17 million. And, “[a]s his revenue grew, Mr. Park bought a 5,000-square-foot house behind high walls on the North Shore of Long Island, and used city and state funds to buy a Mercedes for his 20-minute commute.”

The Times analyzed a decade of billing records and financial statements from Mr. Park’s company and many others, and examined thousands of pages of government records.

Billing fraud appears to be common. Some contractors labeled overseas vacations and spa trips as business travel, or used corporate credit cards for jewelry or groceries. Others hired relatives for no-show jobs, or gave themselves exorbitant salaries and perks like fancy cars, even as they seldom showed up for work. One contractor put a grown son on the West Coast on the payroll, claiming he had opened a satellite office there. Another contractor lived out of state herself.

The bar to entry was low. One preschool contractor had a previous career in Medicare fraud, federal records showed. Another was convicted of weapon possession and workers’ compensation fraud. 

State and city education officials said The Times’s findings were troubling.