This past week, people woke up to a viral 43-minute YouTube video in which Nick Shirley exposed an extensive fraud network at Somali-run child care centers in Minnesota.
The YouTuber and right-wing influencer’s video quickly led to a sharp, actionable response from the Trump administration, which announced on Tuesday that it is freezing child care funds to Minnesota.
Highlights
- A viral 43-minute YouTube video exposed extensive fraud at Somali-run Minnesota child care centers, leading to federal action.
- The Trump administration froze all child care funds to Minnesota and demanded audits over alleged widespread fraud.
- Over $172 million in 2024 federal child care funds to Minnesota are now paused amid claims millions have been stolen.
- Minnesota Governor Walz criticized the freeze, calling it politicized, while ordering audits and supporting prosecutions.
The administration also demanded an audit of some day care centers associated with government programs.
The Trump administration is freezing child care funds to Minnesota
Image credits: Nick Shirley/YouTube
In the video, Shirley was joined by a man, David, who claims to have uncovered fraud worse than “anywhere else ever in history.”
He alleged he had found dozens of child care and autism centers receiving millions of dollars in state funding while not caring for any children. He also warns Shirley that the people running these centers are “exceptionally violent.”
In March 2022, The New York Times had reported on a similar fraud committed by food programs for needy children in Minnesota, siphoning off tens of millions of dollars. The fraud was a $300 million pandemic food scheme that revolved around the nonprofit Feeding Our Future.
Image credits: Nick Shirley/YouTube
57 defendants in Minnesota were convicted for exploiting the state-run, federally funded program meant to provide food for children.
After Shirley's video went viral, the Department of Health and Human Services (HHS) announced it would pause all child care payments to Minnesota.
“This dude has done far more useful journalism than any of the winners of the 2024 @pulitzercenter prizes,” Vice President JD Vance said on X on Saturday.
Citing the video, Deputy Secretary Jim O’Neill said on X that the move is necessary amid “blatant fraud that appears to be rampant in Minnesota.”
O’Neill has demanded audits from Minnesota’s Democratic Governor, Tim Walz, with documents including attendance records, licenses, complaints, investigations, and inspections.
The federal government has provided more than $172 million to Minnesota’s Child Care and Development Fund in 2024, according to the Department of Children, Youth, and Families (DCYF).
Image credits: senate.gov
Assistant Secretary Alex Adams said on X that DCYF provides Minnesota with $185 million in child care funds annually. “That money should be helping 19,000 American children, including toddlers and infants,” Adams said in a video posted on X. “Any dollar stolen by fraudsters is stolen from those children.”
In a conversation with Adams, the director of Minnesota's child care services office could not say with confidence "whether those allegations of fraud are isolated or whether there’s fraud stretching statewide.”
YouTuber Nick Shirley exposed an extensive fraud network at Somali-run child care centers in Minnesota
Walz pushed back on the Trump administration on X, claiming that while the fraudsters are a serious issue the state has been cracking down on, the current move was a part of “Trump’s long game.” “He’s politicizing the issue to defund programs that help Minnesotans,” Walz said.
Just a day before the announcement, U.S. Homeland Security officials were seen conducting a fraud investigation in Minnesota by questioning workers at unidentified businesses.
Earlier this month, a federal prosecutor had alleged that half or more of the roughly $18 billion in federal funds that supported 14 programs in Minnesota since 2018 may have been stolen.
Image credits: Nick Shirley/YouTube
According to the U.S. Attorney’s Office for Minnesota, mostly Somali Americans are involved in these schemes surrounding child nutrition, housing services, and autism programs.
O’Neill, serving as acting director of the Centers for Disease Control and Prevention, added that any payments across the U.S. through the Administration for Children and Families will now require “justification and a receipt or photo evidence” before money is sent.
They have also launched a fraud-reporting hotline and email address.
Image credits: Anna Moneymaker/Getty Images
A spokesperson for Walz told Fox News that the governor has “hired an outside firm to audit payments to high-risk programs, shut down the Housing Stabilization Services program entirely, announced a new statewide program integrity director, and supported criminal prosecutions.”
Walz has said an audit due by late January should give a better picture of the extent of the fraud. These fraudulent operations trace back more than a decade.
In a 2015 video, now resurfacing, several parents can be seen “acting along,” and pretending to drop off their children at a supposed daycare center before leaving immediately. The footage of parents entering these organizations was used to claim government childcare subsidies.