Federal Prosecutors Indict Five Missouri Residents In $511,000 Conspiracy To Defraud State Childcare Expansion Program

Federal prosecutors charge five Missouri residents with stealing $511,000 from a state childcare expansion program. Read the details of the wire fraud case.

By: AXL Media

Published: Apr 1, 2026, 9:49 AM EDT

Source: Information for this report was sourced from U.S. Attorney's Office, Eastern District of Missouri

The Exploitation of Pandemic Relief for Childcare Services

Federal authorities in the Eastern District of Missouri have unveiled a complex fraud scheme targeting the state’s Child Care Relief Funds, a program intended to support families during the recovery from the global pandemic. Between August 2021 and February 2023, five individuals allegedly manipulated the Missouri Department of Elementary and Secondary Education (DESE) to obtain over half a million dollars in federal grants. The funds, which originated from the Coronavirus Response and Relief Supplemental Appropriations Act, were specifically earmarked for the creation of new childcare centers or the expansion of existing infrastructure to address critical service gaps. Instead, prosecutors assert the money was diverted through a series of fraudulent applications and shell business entities.

Systemic Use of Falsified Records and Kickback Agreements

The indictment details a sophisticated approach to bypassing state oversight, involving the submission of altered invoices, false lease agreements, and manipulated payroll records. Key defendants, including 43 year old LaDonna P. Smith and 40 year old Dennis L. Douglas, allegedly utilized names of non functional daycare centers such as "Little Precious Angels" and "Above and Beyond Playmate Center" to trigger massive state payouts. Legal filings indicate that the conspiracy was fueled by internal kickbacks, with Smith reportedly receiving a $30,000 payment from one fraudulent grant. These funds, intended for furniture and educational materials, were instead spent on high end luxury items and personal travel, according to the U.S. Attorney’s Office.

The Breakdown of Individual Charges and Court Appearances

The judicial process for the accused began this week in St. Louis, with several defendants entering not guilty pleas to a variety of federal felonies. Smith faces five counts of wire fraud and two counts of identity theft, while Douglas has been charged with aggravated identity theft alongside his fraud counts. Additional defendants, including Deaun A. Flowers, Princess T. Jones, and Toi P. Jones, face charges of wire fraud and theft of government property. Federal investigators noted that the group attempted to conceal their activities by writing checks to one another after the state demanded repayment for failing to prove legitimate business expens...