Prosecutors: Former daycare director pocketed taxpayer money intended to feed children

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MEMPHIS, Tenn. — A former daycare director is headed to prison after federal prosecutors say he committed fraud by pocketing taxpayer money intended to feed kids at his facility.

Pastor Ollie Stephenson ran Louise’s Learning Tree Daycare Center on Chelsea Avenue. From 2016 to 2020, investigators say he fraudulently received more than $375,000 from a federal and state program designed to feed low income children.

Prosecutors say Stephenson submitted reimbursement invoices for food he never bought and lied about how many children he was actually feeding. For example, one month he reported providing meals for up to 125 kids, but program monitors observed no more than ten children at the daycare. 

David Shaw lives next door. He says the allegations sicken him.

“So much evil in the world now,” Shaw said, “People don’t have no heart. People don’t care no more. People just don’t care. All they want to do is rob, take and steal.”

Officials say the investigation began in 2020 after an audit uncovered discrepancies in the daycare’s records. Prosecutors say Stephenson eventually pled guilty to submitting false statements in April of this year.

The 55-year-old was sentenced Thursday to roughly a year in federal prison and ordered to pay back the money. He’ll have to serve a three year period of supervised release after he gets out.

WREG went to the daycare Friday and knocked on the door but the facility appeared abandoned.

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