How One Agency Built a Multimillion-Dollar Business in Migrant Children

When 17-year-old Destani Williams ran away from an upstate New York residential treatment program in May 2017 and was found dead a week later, it was but the latest in a string of troubling incidents at Cayuga Centers, a 166-year-old child-welfare agency.

In the year leading up to her death, three workers were arrested on charges of abuse, and the agency was sued for negligence as a result. The local police in Auburn, New York, complained about hundreds of emergency calls to deal with runaway residents and violent incidents on the campus, which included residents injuring police officers, throwing chairs through windows and wielding shards of glass to cut staff members.

“It seems that Cayuga Centers has evolved into a business whose priority is making money as opposed to a family service that helps youth meet the challenges of life,” officer Joseph Villano, the president of the local police union, wrote in August 2017 to the agency’s board of trustees in a letter that was made public.

But by then, Cayuga Centers was far along in its transition from a modest nonprofit specializing in residential programs in the Finger Lakes region, first into an agency providing foster care services in New York City and beyond, and then into the country’s largest provider of foster care homes for unaccompanied minors — migrant children who had come to the U.S. border alone.

In 2013, the year before it first signed a contract with the federal government to provide foster care for migrant children, Cayuga Centers had a $1.1 million deficit. These days, it operates in three states, with $48.7 million in annual revenue in fiscal 2017. The bulk of that money has come from the federal government — a total of $123 million since 2014, including $29.5 million since May, in an apparent rush to increase its capacity to deal with the children entering from the Southwest border who had been separated from their parents as part of the Trump administration’s “zero tolerance” policy.

In June, it was revealed that Cayuga was caring for more than 300 of those children in New York City.

City and federal officials say they have had no major problems with Cayuga Centers’ work in foster care and have plans to expand to accommodate more children.

But an investigation into Cayuga’s history found that as the agency was shifting its focus to working for the federal government, problems were festering at its upstate campus. A spokesman for the Department of Health and Human Services, which oversees the office charged with the care of unaccompanied minors, declined to say whether HHS knew about the issues upstate as it kept pouring money into contracts with Cayuga.

A growing number of the young people being placed at its upstate campus had serious behavioral issues, which earned Cayuga more money per child, but also presented more problems for which the staff was ill-prepared, according to former employees. Staff turnover accelerated, leaving less-experienced employees to care for residents.

Some county caseworkers became reluctant to place children with Cayuga because of its poor reputation for safety, a former employee said. The beds were not being filled, and with losses of $2 million, Edward Myers Hayes, 65, the chief executive, closed the residential campus in February, laying off 120 workers. He said it was a business decision that had nothing to do with focusing on the immigrant program. “We had no idea that it would grow,” Hayes said in an interview.

“It’s not a bad program for the agency to do fiscally,” Hayes said of providing foster care for unaccompanied minors, then added, “I think we all would tell you that we would gladly wave goodbye to the contract tomorrow if it meant that the root problems — poverty and violence and victimization in Honduras, El Salvador and Guatemala — were solved.”

The agency had the humblest of beginnings — as the Cayuga Asylum for Destitute Children, an orphanage that opened in 1852 at the tip of Owasco Lake in Auburn.

A century later, Cayuga was operating group residential programs for troubled teens, many referred by state family courts, on its campus there. In the 1990s, it also offered a community-based program — services to families to keep their children out of foster care — and another for people with developmental disabilities.

Hayes, who has a master’s in public administration, took over Cayuga in 1995, and made his ambitions for expansion clear in an interview with the local paper, The Citizen. “What are other people doing and how do we get that?” he said.

In 2002, the agency began offering foster care upstate, in which children were placed with families, rather than living in residential centers, and they went to public schools. It expanded that foster care model to the Bronx in 2003, and later to Florida and Delaware.

But even as Cayuga was seeking to broaden its reach, the residential program in Auburn, which included a drug recovery program for some of the teenagers, was facing problems. From 2013 to 2018, the New York State Justice Center for the Protection of People with Special Needs, a state oversight agency, recorded 164 allegations of abuse and neglect at Cayuga, with 54 claims substantiated.

By 2016, the agency, which could accommodate 53 young people at a time in four residential buildings, had shifted away from its youth drug recovery programs and began bringing in more difficult-to-place children. The “enhanced” daily rate the state paid Cayuga to care for them was $818, state records show.

In August of that year, three employees were arrested on charges of dragging a 13-year-old resident across the floor, according to a Justice Center report. Two of the employees physically restrained the victim for 25 minutes by lying on top of her, and then falsified records of the incident, the report said. The employees pleaded guilty to lesser charges and did not do jail time, court records show. All three were fired, and a lawsuit against Cayuga Centers is pending.

That same year, during a construction project at the agency’s headquarters in Auburn, the federal Occupational Safety and Health Administration found that Cayuga had improperly removed asbestos and four people were exposed to it, violations it deemed “serious.” It fined the agency $8,016.75.

As word spread among county caseworkers about conditions on campus, they avoided sending children there. “They were concerned with the lack of programming and the lack of safety on the campus,” said Sue Walsh, a former intake specialist at Cayuga, whose job was to solicit referrals.

Villano of the Auburn police said that Cayuga Centers treated the police like its own personal security staff. He said officers were constantly called to the campus to investigate violent incidents. Runaways were bolting at an alarming rate, Villano said: 515 calls from 2014 to 2017.

Hayes noted that because Cayuga was designated a nonsecure residential program, the doors were not locked from the inside.

“They didn’t have the trained staff to deal with the individuals they had there,” Villano said.

By last summer, he and his police force had enough, writing to Cayuga’s board of directors, “They are in over their head and everyone else is paying the price.” Staff turnover is always high when dealing with hard-to-place children in residential programs, social welfare officials say. But to John Henry, a former agency trainer who left Cayuga in 2015, the turnover was fed by the lack of emotional or educational support for staff members after their initial training.

“I walked away after 27 years because I was tired of seeing good people, people I was really rooting for, get chewed up and spit out,” Henry said.

The problem, he said, originated in the operating philosophy that Hayes, the executive director, reiterated: “Ready. Fire. Aim.”

The motto was supposed to inspire staff to be entrepreneurial and to seize opportunities. But when it came to dealing with young people’s lives, Henry said, it was irresponsible. “You’re going into something unprepared,” he said.

But it was hard for employees to question Hayes for fear of being fired, Henry said, adding that the chief executive’s management style was one of “intimidation and bullying.”

“Yeah, I’m demanding,” Hayes said. “But I think I’ve treated people fairly.”

Then came the death of the teenager, Destani Williams. Destani had already run away weeks earlier from the female-only residence on the Cayuga campus. One night in mid-May, when the residence was staffed with less-experienced employees, she ran away with another resident, Morgan Eppinger. A week later, Destani was brought to a hospital in the town of Dunkirk, New York, 170 miles away, where she was pronounced dead.

The Erie County Medical Examiner said it was not authorized to reveal the cause of death. The police said an investigation is still pending. Her grandmother, Mamie Harris, 80, said in an interview from Rochester that she still had not heard from Cayuga Centers about how Destani died. “They were supposed to help her,” Harris said.

The Justice Center conducted an investigation, but said it could not comment on its findings because of a state privacy law.

“The state investigated this situation thoroughly and found that the agency did not have responsibility,” Hayes said, and added that even he did not know the cause of death.

Hayes said that other residential centers face similar challenges, which state officials acknowledged. “It’s hard work and we’re dealing with very damaged children,” he said.

Caring for migrant children has proved less complicated for the agency because they live in foster homes until they can be placed with sponsors or relatives — generally for a few months or less. The children spend their days at one of the agency’s centers where they receive educational instruction and clinical services.

After starting with state foster care, in 2013, Cayuga responded to a request for proposals from the federal government, which was looking for care for unaccompanied minors who had been coming across the border in increasing numbers, by saying it could provide foster care for 48 children. In 2014, the government raised that number and signed a deal for 300 placements with Cayuga.

According to Cayuga’s most recent tax filings, from July 1, 2016, through June 30, 2017, the agency could care for about 400 children at a time; they served approximately 1,720 children over the course of the year. Cayuga received more than $28 million in governmental grants that year, for an average of about $16,000 per child, with the money allotted to building costs like rent, foster family payments, clothing, food, educational programming and medical care. In 2016, the agency tried to get into the business of running a residential shelter for the federal government, when Hayes jumped on an opportunity to operate a temporary shelter outside of Dallas. But the local juvenile justice board voted against it because it did not want to house undocumented immigrant children there.

State welfare officials for both Florida and Delaware said that there were no allegations of abuse or neglect submitted for Cayuga’s foster care programs in those states. Marisa Kaufman, a spokeswoman for New York’s Administration for Children’s Services, said, “Cayuga’s rate of maltreatment in foster homes is in line with the systemwide average.” According to city statistics, about 1 percent to 2 percent of children in the system have been the subject of a substantiated abuse or neglect allegation.

ACS says it is helping the agency prepare to expand its program in the city.

Cayuga said it could not disclose information about its program for unaccompanied minors — not even the number of children in its care — citing the demands of its contract with the Office of Refugee Resettlement, the federal agency that oversees the care of unaccompanied minors.

When asked about its monitoring of Cayuga, the spokesman for the Department of Health and Human Services, Kenneth Wolfe, said that there had been three “significant incident reports” involving the agency since December, but said he could not disclose the details. All three received an “appropriate and thorough response,” enabling Cayuga to be “compliant,” he said.

Though Cayuga’s contract called for it to provide 600 placements this spring, administrators said they did not realize they were receiving children separated from their parents, as opposed to children who came to the border unaccompanied, until they arrived in New York. In those first few weeks, the agency seemed overwhelmed, according to lawyers visiting the center.

“When I first realized that there were separated children that we were taking, I was concerned that people were enabling it to happen,” said David Connelly, the chairman of the board of Cayuga Centers. But he said he believed that his agency could provide a humane solution to the crisis, “The important thing is that these children are not warehoused — and that we are not warehousing them.” Even as children were arriving, Cayuga Centers continued to advertise for more foster families and for staff, holding weekly on-the-spot job interviews. Separately, it has put out notices requesting bilingual foster families, advertising in English and Spanish the $1,000 a month per child in tax-free payments foster families could receive.

Every morning, cars roll up to its two centers in New York, one in East Harlem and another on 125th Street near Broadway, dropping children off for day programs. At night and on weekends, the children stay with foster families, as many as eight to a house, often sleeping in bunk beds. During the day, the children can be seen near the 125th Street center, playing soccer and other games on the grounds of Manhattanville Houses.

Many of the separated children have now left Cayuga’s care. In interviews, a dozen separated children ages 5 to 17 and some parents generally praised the treatment received while in Cayuga’s care. The foster homes were mostly in the Bronx and Upper Manhattan, with Spanish-speaking foster parents, many of them Dominican.

Yolany Padilla, from Honduras, said her 6-year-old son, Jelsin, went to performances with his foster mother, a professional singer of traditional Dominican music, and danced bachata with her and the several other foster children living at her home.

But Jefferson Che Pop, also 6, from an indigenous village in Guatemala, was returned to his father, Hermelindo Che Coc, with a rash on both arms, his stomach and back, and a bruise above his eye that he said he had received when he had fallen out of bed, his father said. Che Coc said in a telephone interview that he did not blame Cayuga Centers or the foster family for his son’s physical condition. “I thought I would never see him again,” he said. Meanwhile, the federal government has asked Cayuga to increase its capacity to 900 children in the next month, said Alphonso David, the counsel for Gov. Andrew M. Cuomo, who said all agencies were required to report an increase to the state. Cayuga had not yet done that, so it was unclear, David said, whether it would still be receiving unaccompanied children coming from the border in the coming weeks.

And even despite the millions of dollars in government grants it received to care for these children, it is still soliciting donations through an Amazon Wish List for items for the children: backpacks, coloring books, crayons, jump ropes, lunchboxes, art supplies, a portable badminton net and other sporting equipment. A link on the Cayuga website allowed the public to donate through PayPal.