Five indicted in $511K fraud scheme targeting Missouri childcare relief funds

Five St. Louis-area residents have been indicted on charges of stealing more than $511,000 from a Missouri childcare expansion program funded by federal coronavirus relief money, according to a federal indictment unsealed in March.

LaDonna P. Smith, 43, pleaded not guilty Monday to five counts of wire fraud and two counts of identity theft. Dennis L. Douglas, 40, pleaded not guilty Tuesday to five counts of wire fraud and one count of aggravated identity theft. Deaun A. Flowers, 61, Princess T. Jones, 47, and Toi P. Jones, 65, were each indicted on one count of wire fraud and one count of theft of government property. All three appeared in court last week.

The March 18 indictment alleges that between August 2021 and February 2023, the five defendants exploited a Missouri Department of Elementary and Secondary Education program that awarded Child-Care Relief Funds for opening or expanding childcare facilities. Those funds were drawn from the Coronavirus Response and Relief Supplemental Appropriations Act, according to court documents.

Smith allegedly submitted fraudulent applications on behalf of two fictitious childcare businesses — “Little Precious Angels Childcare 2” and “Little Precious Angels Childcare 3” — collecting a combined $227,066, the indictment says. Douglas fraudulently received $79,927 on behalf of “Above and Beyond Playmate Center,” according to the filing.

Smith, Flowers and Toi Jones together submitted a fraudulent application on behalf of “Totta Tots Daycare” that yielded $129,699, of which $30,000 allegedly went to Smith as a kickback, court documents say. After DESE demanded repayment of $100,000 for failure to spend funds on allowable expenses, Flowers allegedly wrote Toi Jones a check for $15,000 and herself a check for $11,000, the indictment says. Douglas and Princess Jones are accused of fraudulently obtaining roughly $75,000 through “Childhood Memories Daycare and Learning Center,” with $20,000 of that paid as a kickback to Douglas, according to the indictment.

Prosecutors say the defendants submitted fabricated receipts and documentation claiming expenditures on furniture, equipment, salaries, rent and remodeling. In some cases the receipts were entirely false; in others, documents were altered to make purchases outside allowable dates appear eligible for reimbursement, the indictment says. Smith and an unidentified co-conspirator also allegedly attempted to fraudulently obtain an additional $125,000 through a business called “Bright Star Academy.”

“We take allegations of fraud involving programs meant to help Missouri’s children and families very seriously,” U.S. Attorney Thomas C. Albus said in a statement.

The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General and the FBI. Assistant U.S. Attorney Jonathan Clow is prosecuting.