The Wisconsin Department of Justice is investigating possible criminal activity by Community Care Resources Inc., the Middleton foster care agency that the state has accused of misusing millions of taxpayer dollars.
The confirmation came in a letter responding to the State Journal's request for all documents involving CCR.
"The Division of Criminal Investigation (DCI) does have an investigative case file that is responsive to your request," said the letter dated Feb. 28 from Assistant Attorney General Kevin Potter. "However, because the investigation remains open and active, and the continued confidentiality of the records is material to that ongoing investigation, we decline to release that information to you at this time."
The state Department of Children and Families has revoked CCR's license to place foster children and license foster parents, alleging that the company has overcharged counties by $6.1 million between 2009 and 2011 in part to pay for excessive salaries, three homes, six vehicles and three boats for owner Dan Simon and his wife, Mary, who also works at the company. The for-profit child-placing agency continues to operate while it appeals the revocation before the state Division of Hearings and Appeals. A pre-hearing on the appeal is scheduled for June 7.
CCR attorney David Schwartz of Madison said his client "strongly disputes the allegations." He described the charges by DCF as "significant accounting issues that demand full review and analysis."
In a statement issued Wednesday, Schwartz said "we will fully cooperate with any DOJ investigation and are confident any investigation will confirm that no crimes have been committed.
"Some have gone so far as to accuse CCR of fraud without the benefit of the facts," Schwartz said. "This is extremely unfortunate and fundamentally unfair, especially when only one side of the story is currently available to the public. We urge state legislators, reporters and others not to rush to judgment."
The Joint Legislative Audit Committee has ordered an audit of all 24 child-placing agencies under contract with counties in Wisconsin. In recent months, DCF has revoked the licenses of at least three such agencies citing financial mismanagement and other problems.