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Tipsheet

Fraud Stole the Money. Families Will Pay the Price. Here's the Real-World Fallout of MN's Fraud Scandal.

AP Photo/Steve Karnowski

"We're going to be shut down because people stole money."

For many Americans, the massive fraud scandal in Minnesota — ranging from the Feeding Our Future program, to housing, to Medicare/Medicaid — is just a news story.

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But for Jennifer Larson and the autistic children she cares for at the Holland Center Autism and Therapy Clinic in Minnesota, the rampant fraud has very real, sad consequences. 

Tim Walz's blanket freezing of funding for all programs, not just the bad actors, means Larson is going to have to file for bankruptcy and close the autism center.

Dustin Grage and Nick Sotor sat down with Larson for a short documentary on the damage this fraud has done to her and Minnesota's autistic children.

After two decades and a spotless record, Larson's business is forced to close. 

"We're going to be shut down because people stole money," Larson said. "Now all my kids and everyone else's kids and disabled adults are going to be the ones that pay for the fraud."

The blanket freezing of payments failed to distinguish established, legitimate providers like Larson from the fraudsters.

When asked about the parents of autistic children, Larson said, "They're stunned. I saw four of them yesterday...don't make me cry. It's terrible."

Larson opened her first facility for her then-three-year-old son in June of 2004.

"He was three at the time, because I knew with the level of his disability that if I sent him to a school, he wasn't going to have the kind of care that I thought was appropriate, and I was kind of scared," Larson said.

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She opened with her son and two other children whose parents shared her vision for a "holistic" care for their children. "Just a very holistic approach for the whole child to be healthy," Larson said.

Sotor noted that Larson's record for the past 22 years was "spotless," and Larson welcomes the state inspections as an opportunity to "show how good" her facilities are.

Thanks to Tim Walz and the fraud, Larson is now subject to a 90-day waiting period for reimbursements, but has a $250,000 payroll every two weeks for 120 employees across five facilities that serve hundreds of clients, many of them children.

"What is that going to do to your business?" Sotor asked.

"Potentially kill it, if something doesn't change," Larson replied. "This last week, I should've gotten $212,000 for the payment this week, which would've covered my payroll. So I had to infuse my own money in for payroll this week. And, obviously, if I have to wait 90 days, that's a whole quarter, and even when that 90-day period hits, I'll only get the two weeks that just happened."

But, Larson says she'll still have several of those $250,000 biweekly payments fall in that 90-day waiting period.

"So it becomes a multi-million dollar problem to try and stay in business and keep my payroll," Larson said.

"How much longer can you last?" Sotor asked.

"I can't," Larson replied. "I already had to put my money in."

"This is a real business helping disabled children make it," Sotor said. "This is not a fraud, not a front, and she's got the track record to prove it." 

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Sotor even called the phone number and proved it worked.

Larson says her business is the "Cadillac" of services. "We are the Cadillac of services," Larson said, "which means spending more on therapists, and having 19 behavioral analysts instead of maybe one that comes in here or there or quarterly to check in on things. We are a top-notch facility."

"Unfortunately, this will put us under," Larson said. "And it's very unfair because with our record, I think, and to discharge 200+ because the government just threw a bomb on us is just wrong."

Larson says across the state, as many as 40,000 children could be impacted by this.

"I don't know where they'll go," Larson continued, "because the kids that we take are often the kids that the schools can't take because they have too many problem behaviors, they don't know how to handle them. They end up being sent home all the time, and they end up being restrained at some points. So there's nowhere for them to go. They're going to have to go back into their parents' homes, and the parents...who are working will have to stay, and so that disrupts their entire income."

"Nobody wants fraud," Larson said. "I don't want fraud. I pay taxes. But the way to stop fraud isn't to stop the services of truly disabled individuals, to stop the fraud, because all you're doing then is really putting the burden of the fraud that took place on disabled individuals. So the people who pay will be the disabled children, their families, disabled adults, and whoever takes care of them."

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"We can't get the money back," Larson added, "and so now the way to fix that is to completely blow up the community for disabled supports? It's critical care. It's medically necessary. What we do here is medically necessary."

Larson said her businesses and others like hers should be allowed to continue to serve their clients.

"Let us continue to serve," Larson said. "There's no reason that my funds should be held up when I've done everything right because a bunch of people stole money." She recommends a "Trusted Provider Program" to identify reputable services.

Larson told Grage and Sotor that she will have to shut down her business next week if nothing changes. And for the past two decades, Larson hasn't gotten paid for her work. "This has just been my love of doing things for my son and other people like him," Larson said.

When asked about those parents, Larson got very emotional.

Larson also showed Grage and Sotor her facilities, which include a place to receive and practice haircuts and how to manage behaviors for dental work. It is an expansive facility that also includes occupational therapy and art rooms.

"The plan was a holistic center where the child could get everything they need and be in a safe space," Larson said. They are gluten-free, dairy-free, and peanut-free, and use all-natural cleaners.

Larson is speaking out now to help save her business, her employees' jobs, and the services they provide to hundreds of children.

"I would say that Governor Walz should at least step down right now," Larson said. "I just kind of went rogue this week, and somebody's got to do something, and I just started to reach out to media."

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"We've got to scream at the top of our lungs for people to get it," Larson added.

"The fallout and the domino effect on these families...is going to be just horrendous."

At the end of the video, Larson's son thanked Grage and Sotor.

"Thank you for coming," he spelled out. "I am so worried about the children."

This story should be bigger, and the real-world consequences for disabled children, adults, and their families should be headline news. Jennifer Larson's business was not only legitimate but world-class. For 20 years, she's helped autistic children and families in Minnesota, and now she, her employees, and — most tragically — those children are going to pay the price unless something changes soon.

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