Daycare Provider Uses ‘Phantom’ Kids to Steal Public Funds

April 12, 2011 Updated: October 1, 2015

PHANTOM KIDS: Brooklyn DA Charles Hynes (C) joined Chin-Ho Cheng (L), assistant district attorney and Welfare Inspector General Sean Courtney (R), Tuesday to announce the indictment of a day care provider for using phantom kids to steal public funds.  (Courtesy of Brooklyn Da Office)
PHANTOM KIDS: Brooklyn DA Charles Hynes (C) joined Chin-Ho Cheng (L), assistant district attorney and Welfare Inspector General Sean Courtney (R), Tuesday to announce the indictment of a day care provider for using phantom kids to steal public funds. (Courtesy of Brooklyn Da Office)
NEW YORK—A Brooklyn day care provider has been using fictitious identities for children to steal public funds.

On Tuesday, Hynes held a press conference with Welfare Inspector General Sean Courtney to announce the arrest and indictment of a day care provider for allegedly collecting more than $25,000 in public funding for students not enrolled in her program.

“Stealing from children is among the lowest of crimes, and that is exactly what this defendant did, by depleting state education funds to line her own pockets,” said Hynes.

The defendant, Liliana Godzhinsky, 63, was charged with submitting falsified child care vouchers and monthly attendance records to the Administration for Children Services (ACS) for children who never attended the day care center.

“ACS child care funds are meant to help working parents in need. They are not meant to subsidize the lifestyles of the greedy, looking to make a quick buck. Anyone who uses a child to commit this kind of criminal scheme should feel ashamed,” said Hynes.

Godzhinsky received payments from the ACS for the past three years to care for children who were never present at her Luna Park Daycare Center. She owns two day care centers in Brooklyn, Luna Park Daycare Center and Small Wonders Learning Center.

ACS child care assistance exists to help the city’s poor and low-income parents. It enables parents to find work and to continue working, while their children are cared for.

“By billing New York City for no-show children, these corrupt day care providers cheat the city’s funding agency, the ACS, and the public at large,” said Courtney.

For children, day care centers are designed to provide a healthy and safe environment, said Courtney.

“The defendant in this case, Liliana Godzhinsky, twisted these important goals [for] her own financial gain,” said Courtney.

Hynes and Courtney explained how the investigation began with the cooperation of a confidential informant referred to as C1 Mom.

“With recording equipment provided by investigators from the welfare inspector general’s office, C1 Mom made video and audio taped conversations from more than a dozen meetings with Godzhinsky.

The undercover video clips were shown at the press conference on Tuesday. The clips showed Godzhinsky telling C1 Mom what to do, what papers to fill in, how payments were made, and how much she will get from the scheme.

During the three years, ACS paid Godzhinsky about $25,000 for these phantom children. She pocketed $20,000 after giving a $5,000 kickback to CI Mom.

Charges against Godzhinsky include grand larceny in the third degree and fourth degree and 16 counts of offering a false instrument for filing in the first degree.

“If convicted of the top charge, she faces 7 years in prison,” said Hynes who stated that Godzhinsky was taken into custody on Monday morning.

The identity and the ages of the three children whom the defendant fictitiously enrolled in the two centers would not be disclosed, declared Hynes.

Following Monday’s seizure of records from the two centers, further investigation may uncover additional suspects and more evidence of fraud.

“It is clear from what we know preliminarily that a number of other parents participated in this billing scam with Liliana Godzhinsky,” said Hynes.

Those who did should seek legal counsel and make contact with the welfare inspector general of this office, advised Hynes.

“When we identify those who participated with Godzhinsky in this billing scam, we will prosecute them to the full extent of the law,” said Hynes.

Any parents who come forward will receive leniency according to their level of cooperation, Hynes said.

The investigation team did not want to speculate on the number of other parents who might be involved in the fraud.

“That is something that is subject to an ongoing investigation at this point,” said Chin-Ho Cheng, assistant district attorney from the Public Assistance Crimes Unit.

This case may be the beginning of a much wider investigation into such crimes by day care providers. According to Hynes, this is a serious problem although it is not possible to exactly tell how widespread the problem is.