Minnesota fraud made headlines for years, long before influencer’s video

Alleged fraud in Minnesota social service programs has captured public attention in recent days. A video by a conservative YouTube creator went viral with claims of massive swindling by government-subsidized day care centers.

In Nick Shirley’s 43-minute video, he and a man identified only as David go to several day cares owned by members of Minneapolis-St. Paul’s Somali community. Shirley claimed no children were present at the centers, and he estimated they had collected more than $100 million in undeserved government payments.

This led to widespread criticism of Minnesota for what people perceived as the state’s supposed indifference to the alleged misuse of public funds. It also led to Somali-owned day care centers being targeted by racist rhetoric and, in one case, the alleged vandalism of a facility that wasn’t featured in the video.

But problems in Minnesota’s safety net programs have been public knowledge for more than a decade — the subject of extensive local and national news coverage.

At the same time, state officials have tried — although often in vain, by most accounts — to rein in fraud and abuse. Since 2021, a federal investigation has resulted in charges against at least 92 people. About 60 have been convicted or have pleaded guilty, while most of the rest are awaiting trial.

Here’s a look at how the story has unfolded over the past dozen years:

2014

A day care operator was charged with theft and racketeering after an investigation found she had swindled the state of Minnesota out of more than $4 million. The woman fled the country while on bail and never stood trial.

2015

Prosecutors in Hennepin County said four day care centers in the Minneapolis area had collected more than $1 million in state funding by billing for children who did not exist. Investigators set up hidden cameras outside each center and determined they were billing the state for 30% more children than they were serving. Two day care owners pleaded guilty to theft, according to Fox 9 in Minnesota.

2018

The same station, KMSP-TV of Minneapolis, reported that state investigators had identified as much as $100 million a year in day care fraud. A legislative auditor later said the figure could not be corroborated. However, one day care owner named in the news report later pleaded guilty to defrauding the state by billing for childcare services while she was out of the country. She was sentenced to two years in prison and ordered to pay $1.5 million in restitution.

2019

In the wake of multiple fraud cases and in response to a 64-page report into the failures of the state program, Minnesota Gov. Tim Walz added $5 million to the state budget for new investigators, analysts and a tracking system.

2022

Federal prosecutors charged dozens of people with stealing from the $65 million provided to a federally funded program to feed children from low-income families during the COVID-19 pandemic, according to a story in The New York Times.

The investigation centered on a nonprofit, Feeding Our Future, that was supposed to be overseeing 15 separate groups that operated child care centers in Minnesota. They claimed to be providing dinners to 5,000 children each weeknight.

But prosecutors said that a “massive fraud scheme” involved billing the government for meals that were never prepared, much less served.

“Almost none of this money was used to feed children,” prosecutors alleged in court documents. “Instead, conspirators misappropriated the money and used it to purchase real estate, cars and other items.”

At the time, Minnesota officials said they had tried to rein in Feeding Our Future. But after the organization filed a lawsuit claiming the state’s investigation was based on racial discrimination, a judge barred the state from cutting off funding.

March 19, 2025

In March, the Department of Justice reported that the “mastermind” of the Feeding Our Future scheme and a co-defendant were found guilty of the fraud that had ballooned to $250 million in federal funds. 

Sept. 18, 2025

The Department of Justice filed charges against eight people in what it called a “massive housing stabilization scheme.” 

They were accused of submitting “fake and inflated bills” to Medicaid from a program that was designed to find housing for senior citizens and people with disabilities. 

The state had shut down the program before the charges were filed.

Five more people were charged in the case last month. Two of them were Pennsylvania residents who allegedly traveled to Minnesota for what prosecutors called “fraud tourism.” Prosecutors said people come to the state just to exploit poorly regulated programs.

Sept. 24, 2025

The Department of Justice charged two people with defrauding a state program that provides services to children with autism. They allegedly submitted false claims that indicated the staff had worked with children. The government said they paid kickbacks to parents of children enrolled in the program.

Dec. 12, 2025

Walz appointed a judge and former FBI agent as the state’s new director of program integrity, with authority to investigate fraud allegations across multiple state agencies.

“Today we are building on the work of the last several years and strengthening Minnesota’s defenses against fraud,” Walz said. “If you commit fraud in Minnesota, you will be caught and prosecuted to the fullest extent of the law.”

Walz pushed back on claims by the Trump administration that the state had not aggressively pursued fraud cases because many of the people involved are of Somali origin. Most are U.S. citizens, either by birth or naturalization.

“We are a state that chooses not to let people go hungry, or homeless or uneducated,” Walz said. “However, that generosity has been taken advantage of by an organized group of fraudsters and criminals.”

But Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services, accused Walz of looking the other way for political gain.

“Somali scammers get rich off the programs Gov. Walz was supposed to be managing,” Oz said in a video. “Minnesota politicians get elected with Somali votes and keep the money flowing.”

Dec. 18, 2025

Prosecutors announced an investigation into 14 Minnesota programs funded by Medicaid and alleged that as much as $9 billion that was supposed to have helped low-income residents may have been stolen.

“What we see in Minnesota is not a handful of bad actors committing crime,” federal prosecutor Joseph Thompson said at a news conference. “It is staggering industrial-scale fraud.”

Dec. 26, 2025

Shirley posted a video in which he claimed to have exposed widespread fraud in government-subsidized day care centers run by Somali Americans in Minnesota.

Shirley alleged almost a dozen day care centers were not actually providing services, and his video included images of empty facilities.

Shirley’s video got the attention of the White House, where President Donald Trump was already targeting Somali Americans, saying of Somali immigrants, “I don’t want them in our country.” 

However, reporting by CBS News turned up security camera footage of parents dropping off their children at one of the day care centers the same day Shirley claimed to have found no children present.

Dec. 29, 2025

Tikki Brown, commissioner of the Minnesota Department of Children, Youth, and Families, the agency that pays out federal child care assistance to day cares that file claims, addressed Shirley’s video and some of the claims made in it.

“While we have questions about some of the methods that were used in the video, we do take the concerns that the video raises about fraud very seriously,” Brown said at a news conference. 

A state inspector visited each of the day cares featured in the video in the last six months, Brown said. While there are ongoing investigations at several centers, she said, none have uncovered any fraud.

All of the facilities have active licenses with the state as well as children at them, she added, except for one that closed years ago and the Quality Learning Center. 

At first, state officials said they were notified that Quality Learning Center was closing on Dec. 19, though they later clarified that the day care decided to remain open. 

Dec. 30, 2025

The federal government paused funding for Minnesota day care centers because of what deputy Health Secretary Jim O’Neill called “credible allegations” of fraud.

“We have turned off the money spigot and we are finding the fraud,” O’Neill said.

In response, Walz said on X that the state has spent “years cracking down on fraudsters,” calling Health and Human Services’ decision “part of Trump’s long game.”

“It’s a serious issue — but this has been his plan all along,” Walz said. “He’s politicizing the issue to defund programs that help Minnesotans.”

A handful of Republicans have publicly called for Walz to resign over the fraud allegations.

 Dec. 31, 2025

Trump posted two messages on his Truth Social platform, targeting Rep. Ilhan Omar, D-Minn., a Somali native, and claiming, without evidence, that California is the site of more fraudulent activity than Minnesota. 

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Ella Rae Greene, Editor In Chief