A former Indianapolis daycare operator is facing federal charges after prosecutors say she collected more than $359,000 in childcare assistance by reporting children as present when they were not actually at the facility.
Sharon Jackson, 60, of Pendleton, operated three Indianapolis childcare facilities at various times between 2017 and 2024. Federal court documents say she manipulated attendance records at Little Angels of Precious Hearts and reached agreements with some parents to falsely report their children as attending.
The U.S. Attorney’s Office for the Southern District of Indiana says Jackson shared some of the government money with participating parents through Cash App or by leaving cash in gutters at the facility for them to collect. Prosecutors also accuse her of obtaining additional government money through claims for meals that were never provided.
Jackson has been charged with one count of wire fraud and one count of failure to file an individual income tax return. She has agreed to plead guilty to both charges, although her plea had not yet been formally entered in federal court when the case was announced.
Children Were Recorded as Attending When They Were Not There
The Child Care and Development Fund, or CCDF, helps eligible low-income families cover childcare costs while parents work, attend training or pursue education.
Prosecutors say Jackson falsely recorded children as attending Little Angels on dates and at times when she knew they were absent. She used Hoosier Works Child Care cards assigned to parents to swipe children in and out and also submitted attendance through a telephone system using family-specific voucher numbers, ZIP codes and attendance information.
Federal authorities say childcare providers were not permitted to possess the parent cards or other information that would allow them to record a child’s attendance themselves.
Some Parents Got Cash App Payments and Money Left in Gutters
Prosecutors say Jackson also reached agreements with several parents to report that their children attended Little Angels when they did not. Those false attendance records allowed her to collect CCDF payments tied to the children.
In return, Jackson is accused of giving participating parents a portion of the money. Some of the kickbacks were sent through Cash App, while other payments were left as cash in gutters at the childcare facility for parents to pick up.
WRTV reported that prosecutors calculated the CCDF funds Jackson was not entitled to receive at approximately $359,083.60.
Prosecutors Say Fake Food Claims Brought in More Money
Federal prosecutors say Jackson also obtained money through the Child and Adult Care Food Program, which reimburses participating childcare providers for eligible food expenses for enrolled children.
According to court documents, Jackson sought reimbursement for meals that were never provided. Prosecutors say she created fraudulent invoices from food vendors claiming food had been purchased and served when it was not actually provided to children at her facilities.
The government says Jackson received additional CACFP funds based on those claims, but the federal announcement does not provide a separate dollar amount for that portion of the case.
Prosecutors Say She Owed About $287,000 in Federal Taxes
Jackson’s second federal charge involves her income taxes. Court documents say she failed to file individual federal tax returns for 2018 and for 2020 through 2023.
Prosecutors estimate that she owed approximately $287,381.79 for those five tax years. As of the federal filing, she had not submitted returns for any of those years.
Jackson is scheduled to make her initial appearance in federal court on September 10. The USDA Office of Inspector General, HHS Office of Inspector General, FBI, IRS Criminal Investigation and Indiana Family and Social Services Administration investigated the case. The charges remain accusations, and Jackson’s guilty plea must still be formally entered in court.
How Indiana Families Can Report Childcare Voucher Problems
Indiana no longer uses the swipe-card attendance system described in Jackson’s case. Under the state’s current CCDF system, childcare providers track attendance and submit absence information through the provider portal or an approved child care management system. Families can use the state’s parent portal to review information connected with their childcare assistance.
Current Indiana guidance says providers should notify the eligibility office within five business days when a child is no longer enrolled or never attended and should not submit attendance for that service period until the roster is corrected. State rules also allow action against providers for claiming payment for children who were not enrolled or attending.
Families who notice childcare voucher information that does not match the care their child actually received can contact their eligibility office or the state’s Child Care Support Line at 1-800-299-1627. Suspected CCDF fraud can also be reported confidentially to the Indiana Family and Social Services Administration fraud hotline at 800-403-0864, option 5, or by email at ReportFraud@fssa.IN.gov.
When reporting a discrepancy, families should keep records that can help establish when care was actually provided, such as enrollment documents, provider messages, invoices, payment records and their own calendar of attendance. Those records can make it easier to explain why a voucher or attendance entry appears inconsistent with the child’s actual care.