Twenty-three years ago, a greenhorn entrepreneur pulled up to John and Rita Martin's house in Westfield.

He was a social worker, not quite 40, traveling around Wisconsin in search of couples to serve as foster parents for the child placement agency he'd just started.

The Martins liked what they saw. The man was energetic, passionate about helping children, and knowledgeable about the complicated field of human services.

"You could tell right from the get-go that he was a heck of a businessman," said Rita Martin.

The entrepreneur was Dan Simon, and the Martins were among the initial foster families Simon licensed through Community Care Resources (CCR), the company he started in his suburban Madison basement in 1989.

Over the next 20-plus years, Simon built the company into the largest for-profit foster care placement agency in Wisconsin, with 30 employees, nearly 100 foster families and about $6 million in annual revenues.

From a humble childhood in northern Wisconsin, Simon parlayed hard work and long hours into a successful business, friends say, one earning him an average annual salary of around $340,000, plus other income as the company's sole shareholder.

That livelihood is now in question. The state Department of Children and Families has revoked CCR's license, alleging that Simon, 62, and his wife, Mary, 47, overcharged taxpayers $6.1 million between 2009 and 2011. Much of the excess money went toward maintenance of a lavish lifestyle, the state alleges.

The Wisconsin Department of Justice has said it is investigating possible criminal activity by the company, now based in Middleton.

Dan Simon has denied the allegations and appealed the revocation. The company can continue to operate until the matter is resolved. The couple declined to be interviewed.

If the state proves its case, it will be a stunning coda to an otherwise inspiring story.

A blue-jeans guy

Early on, Dan Simon worked mostly out of his car, often in blue jeans and accompanied by his hunting dog, according to those who knew him well back then. He drove all over the state, vetting potential foster families.

"It was pretty much a one-man operation," said Colleen Connelly of McFarland. She and her husband, Dan Morgan, were among CCR's first foster families.

Prior to striking out on his own, Simon worked for another foster placement agency doing the same kind of work. "He didn't like some of the things they were doing, so he wanted to start his own agency to do for the kids what he thought should be done," Connelly said.

People found him down-to-earth.

"His folks were common folks, country folks, and that's pretty much the way he presented himself," said Gordon Cunningham of La Farge, a 23-year CCR foster parent. "His car — I think it was an Oldsmobile — had maybe 125,000 miles on it, but he had no desire to give it up because it still worked."

A quick start

The agency's business model was the same back then as today: Simon licensed foster parents, then contracted with counties to place children in those homes. The counties paid the company a per-child fee. Foster parents received part of the money. The rest went to CCR for administration.

The company expanded quickly, said Gary Eckstein, who worked for CCR in the early 1990s and is now a criminal justice lecturer at UW-Parkside. Simon paid his foster parents more than some of his competitors and attended more closely to their needs, Eckstein said.

"People trusted him," Eckstein said, "He paid his bills on time, he followed through with things, and he always kept his word."

Another of Simon's early hires was case manager Mary Endries. Both were single. Soon, an office romance developed, capped by a marriage.

"She was a good complement for him at the agency," said Barbara Cunningham of La Farge. "She had a good rapport with kids. Dan was getting wrapped up in the business side and less able to interact with the kids, so she was doing more and more of that."

Building a niche

Both Dan and Mary Simon are licensed clinical social workers, signifying advanced degrees and training in psychotherapy. They tapped this expertise to expand into specialty treatment areas, such as finding foster homes for juvenile sex offenders.

Often these were children who had been victims of sexual abuse themselves, said Tim Strait, who worked for CCR as a staff psychotherapist in the mid-2000s and is now a professor at UW-Platteville. CCR provided the children with individual and group psychotherapy and a supportive living environment.

"It was incredibly tough work, and they did it really well," Strait said. "They took absolutely broken kids and helped them put their lives back together."

A clear indication of the company's success came in 2007 with the opening of new headquarters at 6716 Stone Glen Drive in Middleton. The building, constructed on a vacant lot by Dan Simon, is assessed by the city at $1.2 million.

The gleaming office building seemed to divide foster families. Some, such as Nancy Swartout of Appleton, viewed it as an inappropriately showy extravagance for a social services company. Even small things grated on her.

"They spared no expense," said Swartout, who retired in 2011 after eight years as a CCR foster parent. "The bathroom in the lady's room was furnished with hand creams and special soaps and all kinds of hotsy-totsy things. I'm going, 'Geez, all I want to do is wash my hands.'"

Others felt the Simons more than earned the new digs, which double as space for training workshops.

"They absolutely deserve the rewards of their hard work," said longtime CCR foster parent Laurie Oldigs of Lyndon Station. "That's the American dream. That's capitalism."

The Cunninghams felt the new building triggered a change in Dan Simon.

"Maybe it was the stress and strain, but he got kind of aloof," Gordon Cunningham said. Added his wife, Barbara, "It seemed like there was some kind of weight on his shoulders."

Errors alleged

While the state allows an agency such as CCR to earn a profit, federal and state guidelines require that any costs charged to the Department of Children and Families be "reasonable and necessary, provide a benefit to the program and be properly documented."

That's where the state says the Simons strayed. In its letter of revocation, the state said there were "many instances" in which the Simons allegedly charged the state for unallowable expenditures that "appear to be personal in nature."

Those unallowable costs included personal trips to Hawaii, Alaska, Florida and Boston. The latter occurred in 2011 when Mary Simon competed in the Boston Marathon, finishing in a respectable 3 hours and 57 minutes.

Other allegations surround expenses for four vehicles described by the state as "luxury automobiles," including a $43,166 2010 Lexus, and expenditures at the couple's $464,800 home in the town of Oregon and at two residences in the town of Peshtigo, assessed at $256,700 and $244,600.

The costlier vehicles were a recent development, said John Martin, who remains a loyal CCR foster parent 23 years later. "Before the last couple of years, they drove old cars," he said.

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(16) comments

number6

Fascinating how measures of worth, goodness, success, effectiveness are still made with comments on the car you drive, the clothes, the house, the vacations. Living in a material world.

Word

Wow! Whatcha smoking Doug? The guy rips off the state bigtime and the WSJ runs a story making it sound like he was Abraham Lincoln? Great investigative reporting!!! Next time you want to run an ad for privatization, please label it as infomercial.

bobsuruncle
bobsuruncle

Wonder why Republican Governors like Scott Walker & Rick Scott support privatization - $$$ screwing the Government & Taxpayers. FL Governor Rick Scott pocketed $300 million from his HCA/Columbia healthcare company, which defrauded Medicare/Medicaid out of $1 billion.

It was under Walkers Administration that this was caught, so your politicizing this falls Very Flat

DriveThru
DriveThru

Government agencies work for decades without any of this extravagant fraud and theft, but as soon as things are privatized, the crooks come calling. Nothing fails like piritization!

outlander
outlander

Didn't say you were a state worker. Didn't say you worked at all. You seem to presume waving the magic government wand over every problem will make it better than it would be if the private sector is involved. Given that the state in this case seems to have failed to monitor that part of the program it did have control over, I'm skeptical. You say the cause for what now is clearly a monitoring shortcoming was because of a "cut to the bone". Prove it, or at least offer evidence--from what I read in the Anderson testimony, it looks like the agency didn't even have the authority to audit until 2 years ago. You can't cut something to the bone that didn't exist. Given 2001 time frame, it sounds like responsible politicians, no doubt mostly Republicans, realized just handing out money was not going to generate the desired results. If you think that's a leap of logic, be sure to offer evidence to that end, as well, please.

Benedict Ishkott
Benedict Ishkott

All these Community Care Resources are corrupt - group homes, workshops, the works. I had been an insider. Their owners say they work hard to build a business - a business that hires inexperienced workers at minimum wage and provide inadequate health insurance then pockets the cash for themselves (because God forbid one actually shows a profit). They get away with the expenses because they rent the land to themselves. It's so the owners can effectively retire to a 2 million dollar home their non-profit pays for. All the while, they think of themselves as patriotic, deserving Americans who save the tax payer money and perform a public service. But the local police don''t agree the sentiment. Law enforcement deals with the theft, trespassing and assaults the mentally ill and disenfranchised bring to small cities. Close them down, they don't work. It's a racket. Instead, build institutions with locked doors! Hire professionals.

Norwood44

spooky. you were born in the wrong country at the wrong time. you would have been much happier in east germany circa 1960. the state ran everything. nirvana for you.

outlander
outlander

deernuts00--innocent until proven guilty. It looks untoward and I tend to suspect I'll agree with you in the end, but I'd prefer to wait until the judicial process makes a determination.

spooky tooth--the state you are so proud of lacked the foresight to keep an eye out for something like this for some time.

http://host.madison.com/wsj/news/local/govt-and-politics/officials-state-lacked-way-to-detect-alleged-foster-care-overcharges/article_c8ade378-76eb-11e2-906e-001a4bcf887a.html If there's any lesson here, it runs something along the line of "don't expect what you don't inspect", a lesson both the public and private sectors seem quite incapable of learning.

spooky tooth

the state lacked away to detect because they have been cut to the bone. a not for profit run by well staffed professionals would be best for handling child placement. And I'm not a state worker.

spooky tooth

I hope we learned something here, this agency should be run by the state.

A simple audit once a year would have easily caught these types of abuses. They never even questioned or even looked at anything.

The part that I find hilarious is they actually tried to use his charitable giving as a sign that he wasn't such a bad guy. Well giving to charity and then sending the expense to the state to pay isn't very Charitable to me. HE didn't give 1 Cent out of his pocket if he submitted it for re-imbursement! He made the taxpayers pay. This is just another sure sign of how he was ripping us off. He needs to pay this back!!!

deernut00

Sounds like others we hear about. Start with a good idea, and then get real greedy and good at stealing from the taxpayers. Apparently hard to stay honest when the greedy brain cells take over. Will see if he ever pays us back for what he stole from us.

bpro

Agree. Unfortunately, I do not think repayment is likely, but a guilty verdict should produce "slam time" for both if they each are corporate officers.

Probably but get anything we can. Sell 3-4 of his most expensive cars. he can keep the 1-2 cheapest ones.

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