Months after working her last shift at the Bambinos International Learning Center in Hood River, Tammy Justin still hasn’t received her last paycheck of more than $1,000.
She’s just one of a long line of creditors who have filed liens against the property at 220 Clearwater Lane in Hood River, and its owner, Lorena Lowell.
Almost a year ago now, Lowell appealed a state Department of Human Services claim for reimbursement of $83,118 in alleged over-billing for child care services. Because the claim did not involve criminal charges, the hearing was handled in December 2013 by a hearings officer for the Department of Administrative Services.
Last summer, Administrative Law Judge Steven Demarest reversed claims in four of the 12 DHS cases.
The state in those four cases claimed over-billing that amounted collectively to $62,133. As a result of those reversals, Lowell still owes the state $21,189.
Demarest, in his June 10 final order, wrote that the case “is marked throughout by the lamentable lack of records from claimant and inconsistent statements ….”
Demarest based his reversal of the four DHS claims on “persuasive evidence … that when the claimant [Lowell] billed the Department for child care for employees who were Department clients (that is, they qualified for child care support), it [Bambinos] did not provide free child care, or child care at a nominal rate, to other employees working in the same type of position.”
Karen Ertel, a DHS compliance specialist, represented the agency at the December 2013 hearing.
She said Lowell provided statements from employees who said they didn’t get free day care and actually paid $25 a month. She also said some of those witnesses were personal friends of Lowell’s.
John Carter, who heads up the DHS investigations unit, said “regardless of the amount, $21,000 is still a substantial amount of money and a substantial loss. With any level of fraud, there’s no tolerance for us.”
The case arose from a phone call to the state Department of Human Services by an unidentified Bambinos employee in late 2012. Two investigators with the agency’s Fraud Investigation Unit conducted an extensive investigation that led to allegations of “falsified” Child Care Billing forms for reimbursement under the state’s Employment Related Day Care program.
Law judge Demarest also noted that classroom attendance records, which the DHS uses to determine accuracy of its payments, were unavailable in many cases.
Copies provided a year after the start of its investigation, Demarest wrote, “not only inhibit the Department’s ability to administer the child care program, it raises questions about the validity and reliability of the records. That is particularly true in this case, where the evidence shows that claimant altered and created false records.”
Two former Bambinos employees told The Buzz they had witnessed or heard of forms falsified before submittal for state reimbursement.
In a separate action, the state Department of Education disqualified Bambinos in 2013 from participation in the Child and Adult Care Food Program. Citing unspecified “deficiencies,” the Department reached an agreement with Lowell requiring repayment of $12,279. That payment was due by June 1, 2013.
Aimee Craig, public affairs director for the Early Learning division of the Department of Education, said the agency has received no repayment.
“As far as I understand, the money has not been paid back to the Department of Education,” Craig wrote in an e-mail. “The case was turned over to the Department of Revenue for collection.”
Former employees told the Buzz that Lowell bumped up attendance numbers to boost payments for food assistance. They also said she filled out reimbursement forms with parental incomes lower than what they actually earned, so they would qualify for subsidies.
Compounding financial challenges facing Lowell and the facility that once housed Bambinos, Hood River County in August filed notice in Circuit Court to foreclose on the property. The county later received payment of $33,869 in tax and interest for the 2009-10 tax year, forestalling the foreclosure action.
DeAnna Lainhart, Chief Deputy Tax Collector, said last-minute payments in tax foreclosure actions typically come from lenders, who stand to lose all interest in the property if it actually moves to a sheriff’s auction.
Lowell & Sons LLC still owes the county $106,926 in property taxes dating back to the 2010-11 tax year. According to county records, the property has a real market value of $1,866,840.
Although child care services at the facility ended in September 2013, other businesses are operating out of the facility. According to its Facebook page, D’Lish Delivered is providing catering services, including lunches to Horizon Christian School. And according to the Oregon Corporations Division, Lowell’s business partner, Mark Doty, registered a new business, Hood River Hostel, at the Clearwater Lane address in September.
Other still active liens filed against Lowell include
- Nov. 2010 – IRS, $14,976,
- 2009 – Marcus and Karol Cameron on behalf of the Cameron Family Revocable Trust
- 2008 – Mid-Columbia Economic Development District, to secure a loan
- August 2013 – IRS, $13,968.73 (quarterly withholding report)
- November 2013 – IRS, $13,672.18 (quarterly withholding report)
- January 2014 – IRS, $780 (partnership information filing)
Since this case came to light in early 2013 (through exclusive reports in The Buzz), Lowell has consistently declined comment. She did not respond to an e-mail seeking comment on the results of the hearing or on plans to deal with other unpaid tax bills.
In an e-mail that she circulated locally on July 11 — and which someone on that list forwarded to The Buzz — she wrote: “Of course there were some administrative mistakes on my part regarding record keeping but his (the administrative law judge’s) ruling was over 90% on my favor.”
The dollar amount reduction was actually closer to 75 percent, and the number of cases reversed was just a third of the total filed by the DHS.
And as for Tammy Justin? She’s working at the Fairfield Inn in The Dalles, and says it’s going fine.
“At least I’m getting paid,” she said.