The Trump administration said late Tuesday it was freezing child care payments to Minnesota over the reported fraud schemes that have plagued the state.
Jim O’Neill, acting director of the Centers for Disease Control and Prevention, made the announcement on X, saying three actions were taken against the “blatant fraud that appears to be rampant in Minnesota and across the country.”
Mr. O’Neill said the actions included requiring “justification and a receipt or photo evidence” before money is sent through the Administration for Children and Families to families, and launching a dedicated fraud-reporting hotline and email address.
He also praised right-wing influencer Nick Shirley for his video that featured him going to different Somali-run day care centers in Minnesota and seeing whether there were children present.
Mr. O’Neil demanded Minnesota Gov. Tim Walz submit an audit of these centers that includes attendance records, licenses, complaints, investigations and inspections.
Mr. Shirley said in his videos that he uncovered over $100 million in fraud from those centers. He visited multiple Minnesota day care facilities – including the Quality Learning Center in South Minneapolis (which spelled its title on its banner “Learing”) – which had received a large amount of state funds, but appeared inactive in the footage.
“We have turned off the money spigot and we are finding the fraud,” Mr. O’Neill wrote.
The funds will be released “only when states prove they are being spent legitimately,” ACF Assistant Secretary Alex Adams said in a video along with Mr. O’Neill’s X post.
They did not say exactly how much money is being frozen.
A federal prosecutor said earlier in December that $9 billion or more in federal funds allocated to 14 state-run programs since 2018 may have been stolen.
Mr. Walz and others have disputed the amount, but acknowledge the issue and insist they will get to the bottom of it. Many of the purported fraudsters are part of the local Somali community, of which Minnesota has the largest in the country.
Mr. Walz’s office did not immediately respond to a request for comment.
In an X post on Tuesday, Mr. Walz defended his record amid questions about how much he was aware of the fraud.
“We’ve spent years cracking down on fraud – referring cases to law enforcement, shutting down and auditing high-risk programs. Trump keeps letting fraudsters out of prison,” he said.
The announcement comes days after FBI Director Kash Patel said the bureau has surged its resources to Minnesota to investigate claims of widespread fraud and insisting the move was taken before Mr. Shirley’s video went viral.
The fed’s investigation has largely targeted Somali immigrants in Minnesota.
Justice Department officials have been investigating fraud accusations involving members of Minnesota’s Somali community for years.
In 2022, federal prosecutors had announced initial indictments in what they said was a $250 million scheme to defraud a federally funded child nutrition program.
However some estimates have priced the fraud as high as $1 billion while state investigations by state and federal officials remain ongoing.
Federal prosecutors have charged 77 people and alleged that Aimee Bock is the mastermind of the operation that defrauded the nutrition center.
She was convicted in March on four counts of wire fraud, one count of conspiracy to commit wire fraud, one count of bribery, and one count of conspiracy to commit federal programs bribery.
