Flatbush Daycare Operator Sentenced to up to 15 Years in Prison for Stealing Over $50,000 from City by Falsifying Records, Bribing a City Employee

Wednesday, May 31, 2017


Flatbush Daycare Operator Sentenced to up to 15 Years in Prison
For Stealing Over $50,000 from City
By Falsifying Records, Bribing a City Employee

Claimed City Funds for Children at Nonexistent Daycare Center;
Bribed City Employee to Facilitate Scheme

Acting Brooklyn District Attorney Eric Gonzalez today announced that the operator of three Brooklyn daycare centers has been sentenced to up to 15 years in state prison for stealing over $50,000 from the New York City Administration for Children’s Services (ACS) by falsifying and submitting forms to receive City funds for a bogus center and for children who did not actually attend his centers.

Acting District Attorney Gonzalez said, “Not only did this defendant steal tens of thousands of dollars from New York City taxpayers, in carrying out his scheme, he showed utter disregard for the safety of children in his care. Today’s sentence – the maximum possible – holds the defendant fully accountable for his crimes and for the magnitude of what he did.”

The Acting District Attorney identified the defendant as Owen Larman, 44, of Prospect-Lefferts Gardens, Brooklyn. He was sentenced today to the maximum of 7 ½ to 15 years in prison by Brooklyn Supreme Court Justice Guy Mangano. The defendant was convicted of second-degree grand larceny, third-degree bribery, 11 counts of second-degree criminal possession of a forged instrument and 11 counts of first-degree offering a false instrument for filing earlier this month following a jury trial.

The Acting District Attorney said that, according to trial testimony, between 2007 and 2011, the defendant opened three daycare centers in Brooklyn under the name Next to Home. The centers, serving infants, toddlers and school-age children, were primarily paid through ACS vouchers given to families to cover some or all of the cost of childcare services. The defendant stole approximately $51,667 in voucher funds from ACS between June 2012 and April 2013.

The Acting District Attorney said that, according to trial testimony, in August 2011, the New York City Department of Health and Mental Hygiene (DOHMH) found that one of the defendant’s centers was grossly overcrowded with inadequate staff to supervise the children. This center contained the defendant’s afterschool program and was located at 1159 Flatbush Avenue in Flatbush, Brooklyn. The DOHMH took measurements of this afterschool center on June 3, 2011 and issued a new permit in August 2011 allowing only seven children of school age to be on the premises. Prior to this date, the defendant had over 78 children at the afterschool center. The DOHMH is the City agency responsible for inspecting all group childcare facilities in New York City.

According to trial testimony, following the issuance of the new permit permitting only seven school-age children at the 1159 Flatbush Avenue center, the defendant’s common practice was to misrepresent the number of children at his centers by having employees take some of the children temporarily off-site and hold them on buses in parking lots when he knew an inspection was about to occur. Additionally, the buses used by the centers were frequently overcrowded and unequipped to properly transport young children, at times with two to three infants sitting in one car seat and with older children holding infants when car seats were not available.

In October 2011, the defendant applied to the New York State Office of Children and Family Services (OCFS) for a permit for Next to Home to open a new center for school-age children at 5566 Kings Highway in East Flatbush. OCFS is the State agency responsible for issuing registrations for childcare programs serving school-age children. In December 2011, OCFS issued the defendant a permit to run a center at the Kings Highway location for up to 80 school-age children. The owner of 5566 Kings Highway, however, never issued the defendant a lease for this location. The next month, in January 2012, the defendant applied to ACS to receive childcare vouchers for children at that location, which ACS approved. Next to Home, however, never operated a childcare center at 5566 Kings Highway.

The Acting District Attorney said that, despite the nonexistence of a center at 5566 Kings Highway, the defendant went on to file 11 false forms with ACS from June 2012 to April 2013 stating that school-age children with ACS vouchers were receiving childcare services at that location. The forms were, in fact, for some children still receiving services at 1159 Flatbush Avenue in violation of DOHMH’s new registration and license for the site. The forms submitted by the defendant also contained the names of children who were not receiving any services by Next to Home Childcare. Further, the defendant forged the signature of a former Next to Home employee – an educational director – on each form, which required the signature of an approved signatory, such as an educational director at the site.

Relying on these false representations, ACS created and submitted 11 invoices to an outside payment vendor, which stated that Next to Home was entitled to payment for childcare services rendered at the Kings Highway location. As a result, the vendor paid Next to Home approximately $51,667, which was deposited into a bank account controlled by the defendant.

Additionally, some of the children for whom Next to Home received ACS voucher payments did not receive any childcare service from Next to Home at any location. From September 2011 to October 2012, the defendant submitted 10 false forms to ACS claiming that two children received childcare services at the Kings Highway Location and at 1159 Flatbush Avenue, when in fact those two children did not receive any childcare service from Next to Home during the time claimed on the forms.

The Acting District Attorney said that, according to trial testimony, the defendant was able to accomplish the theft by bribing an ACS employee to fax him the ACS forms for the Kings Highway location each month. The ACS forms normally had to be mailed each month to the provider’s center, but since the defendant did not actually operate out of 5566 Kings Highway, he was unable to receive mail there. The ACS employee would fax the defendant the form each month, enabling him to fill it out and return it to ACS for payment. Between May 2011 and January 2014, the defendant returned forms to the ACS employee at least monthly, each time handing the employee $100 to $300 in cash. The ACS employee also was arrested and charged but signed a cooperation agreement and testified against the defendant at trial.

The Acting District Attorney would like to thank the DOHMH Childcare Bureau Assistant Commissioner Frank Cresciullo, and Public Health Inspectors Jenneal Murray and Cheydene McGhan.

The case was investigated by the New York City Department of Investigation.

The case was also investigated by Detective Investigator Jacqueline Klapak of the District Attorney’s Investigations Bureau, under the supervision of Michael Seminara, Supervising Detective Investigator.

The case was prosecuted by Senior Assistant District Attorney Samantha Magnani and Senior Assistant District Attorney Vivian Young Joo, of the District Attorney’s Frauds Bureau, and Senior Assistant District Attorney Sara Walshe, of the District Attorney’s Public Integrity Unit, under the supervision of Assistant District Attorney Michael Spanakos, Chief of the Public Integrity Unit, under the overall supervision of Assistant District Attorney Patricia McNeill, Deputy Chief of the District Attorney’s Investigations Division.