Illinois - Friend of DCFS ex-director accused of ‘large-scale’ fraud : Oct 17, 2011

The state Inspector General’s office on Monday alleged a “large-scale fraud” involving millions of dollars in grants and contracts obtained by a mental-health services provider who was a “personal friend and mentor” of the recently departed director of the Illinois Department of Children and Family Services.

The contractor, Dr. George E. Smith, also appears to be a person of interest in a federal criminal probe of Illinois government contracts and grants. Smith and four of his companies were listed on three grand-jury subpoenas obtained earlier this year by the Chicago Sun-Times. He has not returned telephone calls seeking comment.

Smith has not been charged with any crimes, though he is alleged to have received “millions of dollars of grant funds for services that cannot be substantiated,” according to the 201-page report by the state’s executive inspector general and DCFS inspector general.

A “lack of oversight also led to other improprieties,” the report states.

“Under one DCFS grant, Dr. Smith’s staff dispensed psychotropic drugs to children without acquiring the necessary written permission from DCFS guardians or without determining the proper dosage.”

Besides DCFS, the alleged fraud involves other state agencies, including Chicago State University, the state Department of Human Services and the state Board of Education, according to the report, which also outlines allegations involving “forged signatures,” “ghost employees” and “excessive administrative expenses.”

The inspector generals’ investigation also revealed that former DCFS Executive Director Erwin McEwen, who recently resigned, “apparently ignored repeated ‘red flags’ that DCFS employees raised about Dr. Smith.”

McEwen, the report alleges, refused to cooperate with investigators. Attempts to reach him were unsuccessful.

Asked about the report and McEwen today, Gov. Pat Quinn replied, “He’s no longer the director. He was given the opportunity to resign and he took that opportunity.”

# For The Inspector General's report (PDF) :
http://www.suntimes.com/csp/cms/sites/STM/dt.common.streams.StreamServer.cls?STREAMOID=0FE0PEUV8s6DwNYG1kr1fchJWFYt0zUXIxqWQRlcrvMYz3BIK9ZwCTJUMUjdCVif4Aw$6wU9GSUcqtd9hs3TFeZCn0vq69IZViKeqDZhqNLziaXiKG0K_ms4C2keQo54&CONTENTTYPE=application/pdf&CONTENTDISPOSITION=dcfspdf.pdf


#SOURCE: Chicago Sun Times By Chris Fusco and Dave McKinney
October 17, 2011
http://www.suntimes.com/8264299-418/friend-of-dcfs-ex-director-accused-of-large-scale-fraud.html