A YouTuber’s probe into a massive Somali-run scam in Minneapolis triggered the federal investigation
The US Department of Health and Human Services has suspended federal child care funding to all states pending proper documentation, following a scandal over alleged widespread fraud in Minnesota daycare centers, an agency official told ABC News.
Federal funds will be released “only when states prove they are being spent legitimately,” the unnamed official said on Wednesday, without offering specifics on the required documentation.
HHS spokesperson Andrew Nixon clarified that even those “not suspected of fraudulent activity” must submit their “administrative data” for review. Meanwhile, those “suspected” of fraud are required to provide additional records, including “attendance records, licensing, inspection and monitoring reports, complaints and investigations.”
“The onus is on the state to make sure that these funds, these federal dollars, taxpayer dollars, are being used for legitimate purposes,” Nixon told ABC News.
Previously, HHS froze all child care payments to Minnesota after reports alleged the state had funneled millions of taxpayer dollars to fraudulent daycares over the past decade. It also demanded a comprehensive audit from Minnesota Governor Tim Walz.
Walz has defended his administration, praising the state’s diverse makeup and large Somali community, while accusing President Donald Trump of plotting against him.
“This is Trump’s long game. We’ve spent years cracking down on fraudsters. It’s a serious issue – but this has been his plan all along. He’s politicizing the issue to defund programs that help Minnesotans,” Walz said.
The scandal was triggered by conservative influencer Nick Shirley’s investigation, who alleged in a lengthy YouTube video a large-scale fraud scheme involving Somali-run childcare centers, estimating over $110 million in fraudulent claims.
Department of Homeland Security Secretary Kristi Noem announced a “massive investigation on childcare and other rampant fraud.” FBI Director Kash Patel said resources had been “surged” to Minnesota, cautioning that these cases represent only “the tip of a very large iceberg” and that those responsible could face “denaturalization and deportation.”