It has recently been discovered that massive amounts of fraud are occurring in Minnesota, with the worst of it occurring in the city of Minneapolis. Independent journalist on YouTube Nick Shirley published a video online entitled, “I Investigated Minnesota’s Billion Dollar Fraud Scandal,” where he exposed “day care centers” throughout the city. The most damning example of fraud in the video featured a “day care center” that goes by the name: “Quality Learing Center.” “They had received $1.9 million; yet, with that $1.9 million, they could not even spell ‘learning’ right on their sign,” Shirley explained when he testified on Wednesday in front of Congress. With the help of his source that goes by the name “David”, Shirley was able to confront the fraudsters with documentation on the amount of federal funding they received from the state, the owner’s name, address of the store, and how long they have been registered with the state for.
In one afternoon, Shirley was able to uncover an estimated $111 million in fraud in only nine “day care” facilities he visited. This $111 million that funds the “day care centers” comes from Minnesota’s Child Care Assistance Program (CCAP) that is funded by the county, state, and federal governments— with much of it coming from Minnesota taxpayers. CCAP is available to both licensed and unlicensed “day care centers” that are also entitled to additional reimbursement from counties for caring for children with CCAP, according to “The Child Care Assistance Program.” Reimbursements can range from $130 to $430 per week (house.mn.gov). Moreover, the Department of Health and Human Services (HHS) has frozen funding that has a total of nearly $2.4 billion to these “day care centers” because of the alleged fraud that was taking place in Minnesota. HHS explains, “[They are] rescinding a series of Biden-era child care rules that required states to pay providers before verifying any attendance and before care was delivered. The change will roll back provisions in the 2024 Child Care and Development Fund rule that weakened oversight and increased the risk of waste, fraud, and abuse in federally-funded state child care–including programs now under investigation in Minnesota” (hhs.gov).
According to the HHS, there seems to be enrollment fraud that these “day care centers” are taking advantage of. AP Economics teacher Michael King said, “Many of these cases of fraud date to the Covid-era programs that emphasized speed over accountability because there was a crisis. So, some amount of fraud was unfortunately inevitable; however, what happened in Minnesota and California before that was well outside the expected norm.” King references the fact that the fraud is not exclusive to Minnesota, and it is also occurring in other states, namely in California.
The fraud can be seen in Shirley’s video depicting these “day care centers” as having no children inside of them. In his testimony in front of Congress, Shirely explained, “We arrived and it was an industrialized building and there were two daycares registered at that daycare [building]. And the first thing I noticed is all the windows are blacked out, and there’s no footprints in the snow of any children. There’s no playgrounds or anything that would make it look like it’s a child care [center]… there was nobody there. The doorbell did not even work, and then we continued to go to other daycares and we noticed the same pattern,” (youtube.com). In Shirley’s video, there were a total of 726 children who were licensed to attend these “day care centers.” However, as explained by Shirley, and as one can see when viewing his video, there are zero children attending these “day care centers.” There is not one child who can be seen in his entire 43-minute video where millions of dollars were stolen by these “day care centers.” Additionally, only 15 minutes into the video, over $15 million has already been debunked as being fraudulently acquired.
Some of these “centers” were licensed to the same address. For example, the first one was said to have a total of 120 children registered to both Mako Childcare and Mini Childcare Center, following the pattern of the recent discoveries, there were no children to be found. These two “day care centers” stole more than $5.2 million in funding from fiscal years 2020-2025. When Shirley attempted to enter the center, no one answered when they rang the doorbell even though their hours read 7:00 a.m.-10:00 p.m., seven days a week. Another “center” called Super Kids Day Care Center was shut down when it was called Creative Minds Day Care. Under the name Creative Minds Day Care, it stole $2.45 million during fiscal year 2025. However, it was forced to shut down because there were an excessive number of violations. This “day care center” then reopened the next day under the name Super Kids Day Care Center. This center was licensed to have over 50 children. Moreover, a separate facility housed three fraudulent centers and were licensed to have a total of 102 children. In just two years, all three of the fronts stole a combined $5.1 million.
In addition to the fraudulent day care centers, many health care centers have opened in similar fashion. Namely, one building Shirley investigated housed 14 home health care companies that are estimated to have stolen $50-60 million each year. Each building, being right next to each other, had locked doors or turned Shirley away when he asked to get healthcare at any facility. Another facility had a total of 22 home health care centers on only one property, which Shirley estimates to have stolen about $30 million “as a low estimate.” Again, Shirley was denied medical attention at each health care facility he attempted to enter. The fraud is so blatant at each day care and health care center; it’s a miracle that they were not discovered earlier.
“Federal prosecutors estimate these criminals have stolen at least $9 billion…and I fear it is just the tip of the iceberg. Governor Tim Walz, Attorney General Keith Ellison, and Minnesota’s Democratic leadership have either been asleep at the wheel or complicit in these crimes,” explains House Oversight Committee Chairman James Comer (oversight.house.gov).
While I am not an expert in the field of government and politics, it seems that $9 billion cannot just magically get misplaced and into the hands of illicit “day care centers” by accident. This must be deliberate, and as Comer explained, our representatives must be investigated just as deeply as the alleged fraudsters themselves. Comer would then go on to explain how Minnesota’s Department of Human Services (DHS) “…intentionally backdated documents and awarded nearly $680,000 to a grantee without evidence that any work was performed” (oversight.house.gov). Comer then elaborated on this point saying, “It sounds like Governor Tim Waltz’s DHS may have been fabricating evidence by creating documentation after the fact to mislead auditors. This new report noted that one grantee who received nearly $680,000 from this agency for one month’s work could not provide any documentation or proof that any work was actually completed. The report even notes that the grant manager who approved this money left the agency within days of approving the grant to take a job with the very same grantee that they approved money for” (oversight.house.gov).
Incumbent Governor of Minnesota Tim Walz recently released this statement explaining why he is dropping out of the race for governor that could potentially be his third term in office: “For the last several years, an organized group of criminals have sought to take advantage of our state’s generosity. And even as we make progress in the fight against the fraudsters, we now see an organized group of political actors seeking to take advantage of the crisis. I won’t mince words here. Donald Trump and his allies – in Washington, in St. Paul, and online – want to make our state a colder, meaner place. They want to poison our people against each other by attacking our neighbors. And, ultimately, they want to take away much of what makes Minnesota the best place in America to raise a family. They’ve already begun by taking our tax dollars that were meant to help families afford child care. And they have no intention of stopping there” (mn.gov). Not only does Walz deflect and blame President Trump “and his allies” for “attacking our neighbors,” he also takes no accountability for the fraud that has occurred in his own state and under his own administration. Additionally, Majority Whip Tom Emmer from Minnesota was noted explaining how Walz was able to cover up this fraud in a Congress hearing: “You can’t just let this amount of money get out of your administration over a period of seven years without knowing there was a hearing in the state regarding the fraud. But before that hearing, Governor Walz fired the official who was slated to testify so that they could not testify” (oversight.house.gov). Emmer then added, “It’s clear that someone is criminally complicit” (oversight.house.gov).
Additionally, these fictitious businesses in Shirley’s exposé are all owned by Somali people. The Trump Administration, specifically Secretary of the Treasury Scott Bessent, is now investigating whether money found its way to al Shabaab, a terrorist organization in Somalia. Al Shabaab is an affiliate to al-Qaeda and is a foreign terrorist organization (FTO). In a virtual press conference, according to Fox News (foxnews.com), Bessent explained, “We are thoroughly investigating the fraud, including funds sent to Somalia through money service businesses, which provide financial services outside of a formal bank…These funds could have potentially been diverted to the terrorist organization, al-Shabab. We have traced where the money went and are examining that.”
Ultimately, fraud of any kind cannot be tolerated in this country. Americans pay far too much in tax dollars to have them spent on fictitious businesses that aim to defraud the system and enrich themselves. Therefore, these “day care centers” and “healthcare facilities” must be shut down, investigated, and prosecuted to the full extent of the law, along with the government officials who have been complicit in this fraud. This is the only just response to a crime of this caliber.
