Some Migrant Children Shelters Are Wasting Tax Dollars and Even Abusing Children. Learn What You Can Do to Stop the Problem.
The United States houses thousands of undocumented immigrants. Most are Central and South Americans caught entering the United States without proper documentation. While adults are often held in detention centers, unaccompanied minors – children – are housed in migrant children shelters. Conditions in these facilities are often bleak and fraud is rampant.
In the fiscal year that just ended, the U.S. Department of Health and Human Services spent $1.3 billion to house unaccompanied alien children. Most of these kids are housed in shelters run by nonprofits financed by federal grants and contracts.
U.S. immigration officials have pledged not to separate families anymore but thousands of teens try to enter the U.S. unaccompanied by a parent or guardian. Border Patrol no longer houses these kids in adult detention facilities. Instead, they are turned over to the Department of Health and Human Services.
Keeping kids isn’t cheap. Often, these kids are housed for over a month before they are released or sent back to their home country. According to government data, the cost of housing one child per night is $256!
Why so expensive? We think there is rampant fraud in the migrant children housing industry. An industry that costs taxpayers billions of dollars and frequently involves illegal kickbacks and questionable financial practices. In our opinion, many of the service providers are nonprofit in name only.
On any given day, there are 100 migrant children shelters spread over 17 states and housing between 11,000 and 14,000 kids.
Recently, the government announced a probe of one of the largest providers of migrant children shelters, Southwest Key Programs. A nonprofit, Southwest operates 26 shelters in Texas, Arizona and California. They received $458 million last year.
A New York Times report says, “The nonprofit has engaged in potential self‑dealing with its top executives, stockpiled tens of millions of taxpayer dollars and lent out millions for real estate purchases, acting more like a bank than a traditional charity, according to records and interviews. It has funneled government money through a web of for‑profit companies, converting public funds into private money for the organization, which has paid top executives millions of dollars.”
Federal prosecutors in Austin are investigating possible kickbacks involving the company’s management. The CEO of the company, Juan Sanchez, reportedly earned $1.5 million in salary… salary that comes primarily from our tax dollars.
One of the migrant children shelters operated by Southwest Key Programs is a converted WalMart in Brownsville, Texas. Authorities are questioning why the company lent $6 million to developers to purchase and renovate the facility and turn it into a shelter. The company pays more in rent each year than the original cost to purchase the property.
A U.S. Senator from Oregon attempted to visit a Southwest Key shelter but was turned away. The company says it does permit media visits but visitors are not allowed to speak with the kids. Such a lack of transparency certainly doesn’t inspire confidence.
Thus far, neither Southwest Key Programs or Mr. Sanchez have been charged with any wrongdoing. In our opinion, however, the arrangement certainly smacks of illegal kickbacks.
Another shelter operator, the nonprofit International Educational Services, lost its contracts earlier this year following an FBI investigation. Authorities believe there was insider dealings and that the company was paying well above market rates for shelter locations.
According to the Times article, Juan Sanchez blames jealousy for his legal woes.
“The fact that we have been a very successful organization upsets some people. Whether
it’s because they haven’t been able to do it or they’re jealous or they wish
they could do it. For whatever reason, we just became part of that attack.”
A facility in Virginia is facing allegations of child abuse. The Shenandoah Valley Juvenile Center operates both as a juvenile detention and migrant children shelter. Virginia Governor Northam order a full investigation after reports surfaced this year of kids “beaten while handcuffed and locked up for long periods in solitary confinement, left nude and shivering in concrete cells.”
Reports say that kids held at the Shiloh Treatment Center in Houston were forcibly injected with drugs.
An investigation by Reveal suggested that those kids were being held down and given strong doses of antipsychotic drugs.
“You don’t have to be a rocket scientist here; it looks like they’re trying to control agitation and aggressive behavior with antipsychotic drugs,” said psychiatrist Mark Mills. “You don’t need to administer these kinds of drugs unless someone is plucking out their eyeball or some such. The facility should not use these drugs to control behavior. That’s not what antipsychotics should be used for. That’s like the old Soviet Union used to do.”
An LA Times investigation interviewed a former migrant children shelter worker at the Estrella del Norte facility in Tucson. He said, “the caseload is straining [the] facility. He also said the center was “understaffed and unequipped to deal with children experiencing trauma.” He quit after just a few months watching as kids screamed, tried escaping, threw furniture and attempted suicide. Several kids were running through the halls screaming for their mothers.
Seventy of the 287 kids at the facility were under the age of 13.
Th Estrella del Norte facility is operated by Southwest Key Programs. A spokesperson there said the facility met state licensing requirements.
Who Are the Migrant Children Shelter Operators?
The biggest migrant children shelter operator is Southwest Key Programs. There are plenty of others. According to information we gained from federal budget records, the operators of these facilities in 2018 are as follows:
Southwest Key Programs
BCFS Health and Human Services
Heartland Human Care Services
Cayuga Home for Children
International Education Services (suspended)
Comprehensive Health Services (for profit)
The Children’s Village
Lutheran Social Services
Lutheran Immigration and Refuge Services
Lincoln Hall
Kidspeace National Centers
HIS House
Morrison Child and Family Services
St. Peter St. Joseph Children’s
Florence Crittenton Services
Urban Strategies, LLC
Catholic Charities
Whistleblowers, Cash Rewards and Protecting Children
Except for the occasional donation and faith based centers, all of the money necessary to run these shelters comes from taxpayers. In order to qualify for grant monies and contracts, these organizations have to live up to numerous regulations. Rules are in place both to protect the kids living in the facilities and to make sure taxpayers are getting a fair deal.
Although the Department of Health and Human Services doesn’t have as many quality control and safety rules as we would like to see, each center is required to comply with state laws. Those state laws dictate staffing levels and training.
The feds have fiscal rules to insure center operators aren’t receiving kickbacks, have no undisclosed financial interests in related businesses, are paying fair rents and in the case of non-profits, making sure the operators aren’t paid an excessive salary.
Under the federal False Claims Act, companies and individuals who defraud government funded programs are subject to very high fines and penalties. A present or former employee / contractor with inside information of the fraud can receive a percentage of the recovery. Million dollar rewards are not uncommon, although each case is different.
We are seeking to speak with therapists, billing professionals, finance workers and management with inside information about fraud in these contracts. [It may be too late to collect a reward with respect to Southwest Key Programs, although an award would be possible if someone blew the whistle on a different fraud or fraud at a different facility not yet on the government’s radar screen.]
Whistleblower retaliation is illegal and often we can protect your identity while the government is investigating your claim. It is normal for these investigations to take a year or more meaning no one will know you were the one blowing the whistle.
While the rewards are great, it is also important to blow the whistle so that these kids remain safe. No matter what position you may have on border security, both Democrats and Republicans have been concerned about some of the allegations of abuse and financial waste.
To see if you have a case, visit our government contractor fraud whistleblower page. Have a question or ready to see if you have a case? Contact us online, by email (*protected email*) or by phone at 202-800-9791.
We accept cases throughout the United States. Our fees are charged on a contingency basis meaning you never owe us any money unless we collect a reward for you. And all inquiries are protected by the attorney – client privilege and kept confidential.
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