Virginia Beach police say there was no criminal wrongdoing by Tanya Jones and Heather Hamilton, the operators of Little Monkies Daycare on Dylan Drive.
Photos taken by Virginia Beach sheriff's deputies show playpens tucked in the back of closets.
Deputies were at the home for a furniture repossession.
They say the woman who was at the home didn't even know one of the children was in a closet!
Still police say parents didn't complain and were okay with the arrangement.
But that's not what Jeanette Mathis told NewsChannel 3. .
Child Protective Services is still investigating Little Monkies.
Police say the only violation they found at the daycare was that the operators didn't have a business license.
Little Monkies has since shut down, pending the results of the CPS investigation.