URGENT UPDATE: The Trump Administration has just announced a freeze on all child care payments to the state of Minnesota, following serious allegations of widespread fraud. The announcement was made on Tuesday, October 17, 2023, by HHS Deputy Secretary Jim O’Neill, who emphasized that the administration is actively investigating claims that nearly a dozen daycare centers are misappropriating public funds.
In a post on the social platform X, O’Neill stated, “We have turned off the money spigot and we are finding the fraud.” This strong action follows a viral video by right-wing YouTuber Nick Shirley, which has garnered an astonishing 128 million views. The video alleges that several daycare centers in Minnesota are receiving taxpayer money without providing actual services.
Prominent figures such as Vice President JD Vance and Elon Musk have also shared Shirley’s claims, amplifying the urgency of the situation. During an investigation, Shirley visited the Quality Learning Center, where manager Ibrahim Ali defended the establishment, stating, “There’s no fraud going on whatsoever.” He noted that the video was filmed when the center was closed, operating between 2 p.m. and 10 p.m.
The Minnesota Department of Children, Youth, and Families responded swiftly, acknowledging the concerns raised in the video. Commissioner Tikki Brown said, “While we have questions about some of the methods used in the video, we do take the concerns that the video raises about fraud very seriously.”
O’Neill indicated that Minnesota has been funneling millions in taxpayer dollars to fraudulent daycare operations for over a decade. To combat this, the Department of Health and Human Services will now require photo evidence before distributing funds from the Administration for Children and Families to all states. A new hotline and email address have also been established at childcare.gov for reporting suspected fraud.
This alarming situation is not Minnesota’s first brush with fraud. The state has previously faced scrutiny for what prosecutors labeled the largest pandemic-related fraud case, where an alleged ringleader stole approximately $250 million from a child nutrition program. In total, 57 defendants have been convicted in connection with that case, and former Acting U.S. Attorney Joe Thompson estimates that total losses from all fraud cases in Minnesota could exceed $1 billion.
As Governor Tim Walz prepares for a third term in 2026, he has vowed to tackle this fraud issue head-on. “Such fraud will not be tolerated,” he stated, reaffirming his administration’s commitment to working with federal partners to ensure that fraud is stopped and perpetrators are held accountable.
WHAT’S NEXT: As investigations continue, the implications of these fraud claims could have far-reaching effects on child care funding in Minnesota. Authorities are urging citizens to remain vigilant and report any suspicious activity. The public will be closely watching for updates as both state and federal agencies ramp up their efforts to address this urgent issue.