HHS freezes childcare funds to Minnesota after report on Somali daycare centers: 'Blatant fraud'
The U.S. Department of Health and Human Services (HHS) froze approximately $185 million in federal childcare payments to Minnesota on Tuesday, following a viral report exposing alleged rampant fraud among Somali daycare centers in the state.
We have frozen all child care payments to the state of Minnesota.
— Deputy Secretary Jim O'Neill (@HHS_Jim) December 30, 2025
You have probably read the serious allegations that the state of Minnesota has funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade.
Today we have taken three actions… pic.twitter.com/VYbyf3WGop
"Intrepid journalists have made shocking and credible allegations of extensive fraud in Minnesota's childcare programs," Deputy HHS Secretary Jim O'Neill said in a short video. "We believe the state of Minnesota has allowed scammers and fake daycares to siphon millions of taxpayer dollars over the past decade."
O'Neill, who was joined by Alex Adams, assistant HHS secretary for family support, laid out three actions they have taken against what they described as "the blatant fraud that appears to be rampant in Minnesota and across the country."
The department's first step is launching a national policy requiring justification and a receipt or photo evidence before receiving payments from the HHS' Administration for Children & Families (ACF). The second is a demand that Democratic Minnesota Gov. Tim Walz perform a comprehensive audit of the state's daycare centers. Finally, HHS also rolled out a fraud-reporting hotline and email address at https://childcare.gov.
The move from HHS comes on the heels of a viral video from Nick Shirley, a 23-year-old independent journalist whose recent video exposing alleged widespread fraud among nearly a dozen Somali daycares in Minneapolis has drawn more than 130 million views on X, as of Wednesday.
???? Here is the full 42 minutes of my crew and I exposing Minnesota fraud, this might be my most important work yet. We uncovered over 0,000,000 in ONE day. Like it and share it around like wildfire! Its time to hold these corrupt politicians and fraudsters accountable
— Nick shirley (@nickshirleyy) December 26, 2025
We ALL… pic.twitter.com/E3Penx2o7a
Shirley's report, which exposed licensed centers that appeared vacant despite receiving millions in taxpayer funds — such as $1.9 million to "Quality Learing [sic] Center" — drew the attention of leading government officials, including Attorney General Pam Bondi.
"[Shirley's] work has helped show Americans the scale of fraud in Tim Walz's Minnesota," Bondi said. "[The DOJ] has been investigating this for months. So far, we have charged 98 individuals — 85 of Somali descent — and more than 60 have been found guilty in court. We have more prosecutions coming…BUCKLE UP, LAWMAKERS!"
Minnesota officials have defended the centers' active licenses and recent inspections, with Walz calling the freeze politicized. His office has been dismissive of the fraud allegations, saying in a statement that they have been "combatting fraud for years while the President has been letting fraudsters out of jail," according to Politico.
"Fraud is a serious issue. But this is a transparent attempt to politicize the issue to hurt Minnesotans and defund government programs that help people," his office added.
Since Shirley's report, other independent journalists have begun uncovering what appear to be similar Somali daycare fraud schemes in other parts of the U.S., including Seattle, Washington and Columbus, Ohio.
20 Somalian daycares within 3 blocks in a subsidized housing area in Seattle
— Libs of TikTok (@libsoftiktok) December 31, 2025
When a journalist goes to ask questions, they call the police on him
No kids, doors slammed in his face.
Industrial level fraud across the country pic.twitter.com/YG3Ntd2dNI
Earlier this month, House Budget Committee Chairman Jodey Arrington, R-Texas, announced that more than $1 billion in federal taxpayer funds during the COVID-19 pandemic was "stolen in Minnesota under the leadership of Governor Walz and after repeated fraud warnings from hundreds of his own employees."
President Donald Trump has expressed contempt toward the Somali community in Minnesota, which he has claimed is disproportionately engaged in fraudulent activity.
On Nov. 21, Trump announced on Truth Social the immediate end to Temporary Protected Status (TPS) for Somalis in Minnesota, a program shielding some 705 individuals nationwide from deportation due to Somalia's ongoing instability.
"We don't want them in our country. Their country stinks. … When they come from Hell, they complain, they do nothing but [expletive], we don't want them in our country. Let them go back to their country and fix it," he said during a tense cabinet meeting earlier this month.
