President Trump’s HHS slams the brakes on $10 billion in child care funding to Democrat-led states like Minnesota, exposing potential billions in taxpayer fraud tied to fake daycare centers in immigrant communities.
Story Snapshot
- Trump administration freezes $10B in federal child care funds across five states over rampant fraud allegations, prioritizing American taxpayers.
- Viral video by Nick Shirley reveals empty Minneapolis daycares claiming federal payments, sparking nationwide scrutiny.
- Federal prosecutors probe up to $9B in Medicaid fraud, linked to prior scams like Feeding Our Future’s $250M theft.
- Minnesota Gov. Tim Walz disputes scale but drops reelection bid amid investigations into lax state oversight.
Viral Video Ignites Federal Crackdown
Conservative influencer Nick Shirley released a viral video in late December 2025 showing empty daycare centers in Minneapolis’ Somali communities. These facilities claimed to serve children while receiving federal funds through Medicaid and child care programs. The footage prompted immediate action from President Trump’s HHS, which paused Minnesota’s $185 million in annual child care funding. This move highlights years of lax oversight under Democratic governance, protecting hardworking American families from wasteful spending.
History of Fraud in Minnesota Programs
Minnesota’s subsidized child care vulnerabilities date back to a 2016 federal audit revealing a 19% payment error rate. COVID-era expansions worsened issues, enabling the Feeding Our Future nonprofit to defraud $250 million via fake meal claims from 2021-2022. Leaders like Aimee Bock faced convictions in 2025. Overlaps with child care subsidies and Medicaid’s EIDBI program for autism services show inflated billing patterns, particularly in immigrant-run centers. Trump officials frame this as systemic abuse eroding trust in welfare systems.
Prosecutors now investigate $9 billion in potential Medicaid fraud across 14 programs since 2018, half of Minnesota’s $18 billion allocation. While not all tied directly to daycares, interconnected networks raise alarms about taxpayer dollars funding ghost operations.
Trump Administration Takes Decisive Action
On January 6, 2026, HHS expanded the freeze to $10 billion in Child Care and Development Fund payments across California, Colorado, Illinois, Minnesota, and New York. New nationwide rules mandate receipts and photos for attendance claims, curbing abuse. President Trump labeled Minnesota a “fraud hub,” criticizing Somali-linked operations and Democratic leaders like Gov. Walz. This asserts federal priority over state mismanagement, safeguarding funds for legitimate American needs.
🚨 MAJOR BREAKING: The Trump administration has officially FROZEN all childcare payments for Minnesota following reports of major fraud
— Nick Sortor (@nicksortor) December 30, 2025
They’ve also launched a fraud reporting portal at https://t.co/xAWDmF2b9J
Tim Walz has received a demand letter from HHS ordering a full audit… pic.twitter.com/pJc20YSqvQ
FBI investigations ramped up December 29, 2025, prioritizing non-child-care Medicaid schemes. State inspections found 9 of 9 centers operational, with 8 having children present, though citations for safety issues persist. Walz hired a fraud czar but acknowledges possible billions lost, disputing the $9B child care-specific claim.
Impacts on Families and Broader Reforms
Short-term, funding halts strain low-income families reliant on subsidies amid a child care crisis. Long-term, stricter verification promises accountability, eroding trust in programs prone to fraud. Somali operators face stigma, while Minnesota probes 19 social services. Other states like Idaho, Utah, Ohio, and Texas launch preemptive audits. Trump’s actions pressure Democrat governors, reinforcing limited government and fiscal responsibility core to conservative values.
Sources:
https://abcnews.go.com/Politics/hhs-freezes-10-billion-child-care-funding-5/story?id=128945422
https://www.cbsnews.com/news/minnesota-fraud-schemes-what-we-know
https://www.cato.org/blog/minnesota-fraud-update
https://www.mprnews.org/story/2026/01/06/timeline-of-fraud-investigations-that-shaped-walz-tenure