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The newspaper identified 16 child-care centers with recent connections to drug operations, and the number is likely much higher. Those 16 alone have collected more than $8.5?million in public subsidies since 2006.

Records show many of those centers have been used to stash and transport drugs, launder dirty cash and provide fake employment for criminals – at taxpayers’ expense.

In an ongoing investigation that has spanned more than a year, the Journal Sentinel has revealed rampant fraud within Wisconsin Shares, the state’s $350?million child-care subsidy program. The investigation has spurred sweeping reforms by lawmakers and regulators, led to more than 130 child-care centers losing public funding and resulted in criminal charges against several providers.

But the problems don’t end with unscrupulous parents and providers teaming up to scam subsidies. In June, the Journal Sentinel reported nearly 500 child-care providers had criminal records – some including felony convictions. This investigation went further. It found the tentacles of some child-care centers also extend into dangerous criminal operations.

In one case, a gunman burst through the door of a home-based child-care business, stuck a gun in the face of an 8-year-old girl and demanded money from the provider. Police believe the invasion was drug-related.

In another instance, police found cocaine, marijuana and cash in a home where children were being cared for by a Sheboygan Falls day care provider whose husband was a suspected drug dealer.

And in yet another, a Milwaukee child-care provider gave $10,000 to her live-in boyfriend, a convicted drug dealer, who used the money to buy 2 kilos of cocaine from an undercover cop in 2007. It is unclear whether the money used for the drug purchase came from Wisconsin Shares. But the woman was paid $39,621 that year by the state through the program.

She was on pace to collect $50,000 this year and remained in business until Friday, when the state yanked her license in anticipation of this story.

“This is astounding – and the government is fostering this,” said state Rep. Mark Gundrum (R-New Berlin), who has introduced legislation to reform the troubled Wisconsin Shares program.

To tell this story, the Journal Sentinel cross-referenced databases containing search warrants and court records with child-care providers. It also reviewed hundreds of pages of police reports, federal indictments, state child-care records, criminal complaints, property records and other public documents. In addition, the newspaper interviewed police officers and prosecutors and relied on tips from child-care center employees and parents.

There is no way to know how widespread the corrupt connections are.

Child-care providers are seldom criminally charged for involvement in drug crimes. Search warrants aimed at drug dealers often make no mention that the dealer’s wife or live-in girlfriend is a child-care provider – even when the day care is the site of the search.

And nobody – not regulators nor law enforcement officials – tracks the overlap.

Yet, cops and prosecutors say they see links between day care providers and drug dealers all the time.

“Probably in 25% of the cases I deal with, there is a wife or girlfriend in the day care business,” said Mario Gonzales, a veteran gang and drug prosecutor with the U.S. attorney’s office.

Regulators, too, see the connections. State records show parents and employees commonly file drug-related complaints about child-care centers. But inspectors rarely substantiate the allegations.

Officials from the Department of Children and Families said Friday they were unaware of the specific drug ties until questioned last week by the Journal Sentinel. On Friday, they revoked the licenses of two of the providers and launched investigations into others.

“We will not accept providers who place children in harm’s way, and if we find out they have, we will shut them down,” said Reggie Bicha, secretary of the department.