Trump Freezes Millions in Minnesota Childcare Over Fraud Claims
Trump halts $185M in Minnesota childcare funding after fraud allegations. HHS probes daycare fraud as officials clash over immigration and oversight.
Trump administration says it's withholding childcare funds from Minnesota amid fraud allegations
The Trump administration has said it has suspended childcare payments to the state of Minnesota after a conservative YouTuber alleged that several centers run by Somali immigrants were receiving public funds without providing care.
In a post on X on Tuesday, a top official at the Department of Health and Human Services (HHS) cited the viral video and said the agency would "target the blatant fraud that appears to be rampant in Minnesota."
State officials have denied the fraud allegations made in the video.
The state, which has the largest population of Somali immigrants in the US, has recently seen increased immigration enforcement after President Donald Trump said he did not want them in the country.
"We have suspended all childcare payments to the state of Minnesota," HHS Deputy Secretary Jim O'Neill announced in a post on X on Tuesday.
He said the decision came "amid serious allegations that the state of Minnesota has paid millions of taxpayer dollars to fraudulent daycare centers across Minnesota over the past decade."
The department said it would suspend the annual payment of $185 million (£137 million) to the state until a full review of the centers in question is completed.
O'Neill's post also stated that HHS would implement a "Defend the Spend" system for all future payments to every state. He said, "This will require justification and receipts or photographic evidence before any money is sent to a state."
The video by Nick Shirley, which has garnered millions of views across multiple social media platforms since being posted over the weekend, alleges that nearly a dozen centers were not providing services or had no children present when Mr. Shirley visited. Minnesota Department of Children, Youth and Families Commissioner Tikki Brown said the sites shown in the video have been regularly inspected.
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“While we have questions about some of the methods used in the video, we take the concerns raised about fraud in the video very seriously,” she said.
She added that two of the facilities had already closed.
CBS reviewed public records for the centers and found no evidence of fraud, although it did find deficiencies related to safety, cleanliness, equipment, and staff training. All but two of the facilities mentioned in the video had active licenses and had been visited by state regulators within the past six months. The most recent inspection was on December 4 at Sweet Angel Daycare, a center that has drawn particular attention on social media.
FBI Director Kash Patel said earlier this week that he is aware of the "recent social media reports," and that the fraud investigation in Minnesota has been ongoing since the pandemic.
"The FBI believes this is just the tip of a very large iceberg. We will continue to follow the money and protect the children, and this investigation is still ongoing," Patel wrote on X.
In March, a federal jury convicted the head of the now-defunct organization Feeding Our Future in Minnesota, in what prosecutors described as the largest pandemic aid fraud scheme to date, involving $250 million (£186 million).
Minneapolis is the latest target of Trump's months-long crackdown on immigration and crime in cities across the US.
Earlier this month, Trump said he doesn't want Somali immigrants in the US, telling reporters they should "go back to where they came from" and that "their country is not good for a reason."
Minnesota is led by Democratic Governor Tim Walz, who was a running mate for former Vice President Kamala Harris in the 2024 election. Walz, who has clashed with Trump on immigration and other issues, said: "We welcome support in investigating and prosecuting crime. But pulling PR stunts and indiscriminately targeting immigrants is not a real solution to the problem."
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