Federal officials have frozen payments to Minnesota child care programs, including day cares, over allegations of wide-scale fraud by child care providers, they announced Tuesday.
Jim O’Neill, deputy secretary of Health and Human Services, and Alex Adams, assistant secretary for the Administration for Children and Families, announced in a video message posted to X that they were immediately freezing $185 million intended to support 19,000 children following a viral video from a right-wing influencer purporting to expose day care centers run by Somali Americans that receive federal funding but are inoperable. The announcement from federal officials explicitly cites the work of the influencer, Nick Shirley.
O’Neill said all payments to Minnesota will require “a justification, receipt, or photo evidence” and that he had demanded “a full 360 review” of the centers from Democratic Gov. Tim Walz. Federal officials also launched what they called “a dedicated fraud-reporting hotline and email address,” and directed the public to file reports at a government website.
“Funds will be released only when states prove they are being spent legitimately,” O’Neill wrote in a follow-up post.
The team representing the so-called Department of Government Efficiency at the Department of Health and Human Services said in a post on X on Tuesday night that they will be expanding the justification requirement to “all ACF payments across America,” and that they would aim to make the receipts public.
Adams said in the video that the director of the Minnesota child care services office “could not tell me with confidence whether those allegations of fraud are isolated or whether there is fraud stretching statewide” when they spoke on Monday.
Shirley’s 43-minute video, posted Dec. 26, has more than two million views. It was shared on social media by Trump administration officials including Vice President JD Vance and Education Secretary Linda McMahon.
“This dude has done far more useful journalism than any of the winners of the 2024 [Pulitzer] prizes,” Vance wrote when he shared Shirley’s video, tagging the wrong account in referring to the Pulitzer awards.
U.S. Attorney General Pam Bondi and FBI Director Kash Patel also mentioned the video.
In his video, Shirley goes door-to-door visiting the alleged day care centers, all of which have locked doors and opaque windows, with no children in site. Some people at the buildings open the door to talk to Shirley but deny him entry or tell him to leave. Shirley points to the scenes as evidence that the organizations are defrauding the government of tens of millions of dollars.
On Monday, a day before federal officials announced they were freezing the funds, the Department of Homeland Security shared a video on social media of federal agents going door-to-door at what they called “suspected fraud sites” in Minneapolis.
“The American people deserve answers on how their taxpayer money is being used and ARRESTS when abuse is found,” the DHS post says.
But Shirley’s allegations remain unsubstantiated. CBS affiliate WCCO of Minnesota found that all but two of the centers Shirley mentioned have active licenses, and state regulators visited all the active locations within the past six months.
On Tuesday, WCCO found more than a dozen children and several staff members at one of the day care centers that Shirley had claimed was a front for fraudsters. The day care provided WCCO security footage showing families arriving to drop off their kids before and after Shirley showed up that day to record his video. The director of the facility, Ahmed Hasan, told the station that Shirley arrived with a team of up to eight people, some of whom were masked, which prompted fears in light of recent federal immigration activity in the area.
After the officials’ Tuesday announcement, Walz said in a statement on X that Trump was “politicizing the issue to defund programs that help Minnesotans.”
“We’ve spent years cracking down on fraudsters,” Walz wrote. “It’s a serious issue — but this has been his plan all along,” he added, referring to President Donald Trump.
In another post, Walz wrote: “Trump keeps letting fraudsters out of prison,” referring to the president’s pardons and commutations.
The governor also shared screenshots of an op-ed he wrote in the Minnesota Star Tribune published earlier this month in which he outlined the efforts his office was taking to stop fraud.
A spokesperson for the Minnesota Department of Children, Youth, and Families did not immediately respond to MS NOW’s request for comment Wednesday morning.
White House press secretary Karoline Leavitt said in an interview on Fox News on Wednesday morning that the administration also plans to expand its investigation into child care fraud to other blue states, such as California and New York.
The payments freeze is the latest example of the Trump administration’s attacks on the Somali community in Minneapolis. Minnesota has a Somali population of 80,000 people, 78 percent of whom live in the Twin Cities of Minneapolis and St. Paul. Trump has said he does not want Somali immigrants in the United States.
The attacks ramped up last month after a story published on Nov. 19 in City Journal, a policy publication run by the conservative Manhattan Institute, alleged that Somalis in Minnesota had sent some of the child care payments to Somalia using informal networks of money traders, through which Somalia-based terror group Al-Shabaab ended up with some of the cash.
Federal prosecutors have confirmed there was large-scale social services fraud in Minnesota, with dozens of people — many of whom are Somalis — having been convicted of stealing more than $1 billion in public funds intended for food, housing and services for people with disabilities. But the accusation that money went to Al-Shabaab was first made years ago by a local Fox affiliate, and a subsequent state audit could not substantiate the claims. Still, that has not stopped the Trump administration from using the convictions to target Somalis en masse, with Immigration and Customs Enforcement launching an enforcement operation against the city’s undocumented Somalis earlier this month.
At a news conference shortly after that operation was announced, Minneapolis Mayor Jacob Frey said “almost all” of the city’s Somali population “are both documented and citizens.”
Leavitt said on Fox that the State and Homeland Security departments are considering revoking the citizenship of Somalis convicted of fraud, and that officials are “not afraid to use denaturalization.”
“That’s a tool at the President and the Secretary of State’ss disposal,” she said, “and it’s one this administration has previously used before.”
Erum Salam contributed reporting.
Julianne McShane is a breaking news reporter for MS NOW who also covers the politics of abortion and reproductive rights. You can send her tips from a non-work device on Signal at jmcshane.19 or follow her on X or Bluesky.