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MILWAUKEE - The state is investigating a local daycare for defrauding the system. But it's what investigators found inside the building that's even more shocking.
 
The sign outside Bee's Day Care on North 49th Street says closed and it may stay that way based on serious allegations uncovered by the state.

Among the findings in court documents, Bee's billed the state for children who did not exist. The state found no children and no one home during three routine visits in March and May.
 
I went to the day care, where the owner Beatrice Johnson lives, to see what she had to say about the allegations.

I asked, "The state says it looked like you were over billing them?"

"I'm not making any comments about that at this time," Johnson told me.

On Tuesday, investigators removed records for attendance, payroll, billing and employees as well as computers and that's not all.

In the search warrant, investigators found what they are calling a marijuana grinder inside the house with suspected marijuana residue.  

But the focus of the investigation is on Bee's billing records and why it allegedly billed the state for more hours than it could have legally provided.

I asked, "Do you know they were out here searching?"

"Yeah," Johnson said.

I asked, "They said they found your billing records and it looks like you were over billing?"

"I'm not making a comment," said Johnson as she closed the door on me.

Johnson has not been charged with any wrong doing.

The investigation into fraud allegations continues for dozens of day cares. Charges could come in a week or two.