MINNEAPOLIS (AP) — President Donald Trump’s administration announced on Tuesday (Dec. 30, 2025) that it’s freezing child care funds to Minnesota and demanding an audit of some day care centers after a series of fraud schemes involving government programs in recent years.
Deputy Secretary of Health and Human Services Jim O’Neill said on the social platform X that the move is in response to “blatant fraud that appears to be rampant in Minnesota and across the country.”
Minnesota Gov. Tim Walz pushed back on X, saying fraudsters are a serious issue that the state has spent years cracking down on but that this move is part of “Trump’s long game.”
“He’s politicizing the issue to defund programs that help Minnesotans,” Walz said.
O’Neill referenced a right-wing influencer who posted a video Friday claiming he found that day care centers operated by Somali residents in Minneapolis had committed up to $100 million in fraud. O’Neill said he has demanded Walz submit an audit of these centers that includes attendance records, licenses, complaints, investigations and inspections.
“We have turned off the money spigot and we are finding the fraud,” O’Neill said.
The announcement comes one day after U.S. Homeland Security officials were in Minneapolis conducting a fraud investigation by going to unidentified businesses and questioning workers.
There have been years of investigations that included a $300 million pandemic food fraud scheme revolving around the nonprofit Feeding Our Future, for which 57 defendants in Minnesota have been convicted. Prosecutors said the organization was at the center of the country’s largest COVID-19-related fraud scam, when defendants exploited a state-run, federally funded program meant to provide food for children.
A federal prosecutor alleged earlier this month that half or more of the roughly $18 billion in federal funds that supported 14 programs in Minnesota since 2018 may have been stolen. Most of the defendants in the child nutrition, housing services and autism program schemes are Somali Americans, according to the U.S. Attorney’s Office for Minnesota.
O’Neill, who is serving as acting director of the Centers for Disease Control and Prevention, also said in the social media post Tuesday that payments across the U.S. through the Administration for Children and Families, an agency within the U.S. Health and Human Services Department, 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.
The Administration for Children and Families provides $185 million in child care funds annually to Minnesota, according to Assistant Secretary Alex Adams.
“That money should be helping 19,000 American children, including toddlers and infants,” he said in a video posted on X. “Any dollar stolen by fraudsters is stolen from those children.”
Adams said he spoke Monday with the director of Minnesota’s child care services office and she wasn’t able to say “with confidence whether those allegations of fraud are isolated or whether there’s fraud stretching statewide.”
Trump has criticized Walz’s administration over the fraud cases, capitalizing on them to target the Somalia diaspora in the state, which has the largest Somali population in the U.S.
Walz, the 2024 Democratic vice presidential nominee, has said an audit due by late January should give a better picture of the extent of the fraud. He said his administration is taking aggressive action to prevent additional fraud. He has long defended how his administration responded.
Minnesota’s most prominent Somali American, Democratic U.S. Rep. Ilhan Omar, has urged people not to blame an entire community for the actions of a relative few.
Dec. 30, 2025, update:
MINNEAPOLIS (AP) — A surge of federal officers in Minnesota follows new allegations of fraud by day care centers run by Somali residents.
President Donald Trump has previously linked his administration’s immigration crackdown against Minnesota’s large Somali community to a series of fraud cases involving government programs in which most of the defendants have roots in the east African country.
Surge in federal officers
Department of Homeland Security Secretary Kristi Noem and FBI Director Kash Patel both announced an increase in operations in Minnesota this week. The move comes after a right-wing influencer posted a video Friday claiming he had found that day care centers operated by Somali residents in Minneapolis had committed up to $100 million in fraud.
Tikki Brown, commissioner of the Minnesota Department of Children, Youth, and Families, said at Monday news conference that state regulators took the influencer’s allegations seriously.
Noem posted on social media that officers were “conducting a massive investigation on childcare and other rampant fraud.” Patel said the intent was to “dismantle large-scale fraud schemes exploiting federal programs.”
Past fraud in Minnesota
Minnesota has been under the spotlight for years for Medicaid fraud, including a massive $300 million pandemic fraud case involving the nonprofit Feeding Our Future. Prosecutors said it was the country’s largest COVID-19-related fraud scam and that defendants exploited a state-run, federally funded program intended to provide food for children.
In 2022, during President Joe Biden’s administration, 47 people were charged. The number of defendants has grown to 78 throughout the ongoing investigation.
So far, 57 people have been convicted, either because they pleaded guilty or lost at trial.
Most of the defendants are of Somali descent.
Numerous other fraud cases are being investigated, including new allegations focused on child care centers.
In news interviews and press releases over the summer, prosecutor Joe Thompson estimated the total loss from all fraud cases could exceed $1 billion. Earlier this month, a federal prosecutor 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.
Crackdown targeting Somalis
Trump’s immigration enforcement in Minnesota has focused on the Somali community in the Minneapolis-St. Paul area, which is the largest in the country.
Trump labeled Minnesota Somalis as “garbage” and said he didn’t want them in the U.S.
About 84,000 of the 260,000 Somalis in the U.S. live in the Minneapolis-St. Paul area. The overwhelming majority are U.S. citizens. Almost 58% were born in the U.S and 87% of the foreign-born are naturalized citizens.
Among those running schemes to get funds for child nutrition, housing services and autism programs, 82 of the 92 defendants are Somali Americans, according to the U.S. Attorney’s Office for Minnesota.
Republicans have tried to blame Walz
Minnesota Gov. Tim Walz, the 2024 Democratic vice presidential nominee, has said fraud will not be tolerated and his administration “will continue to work with federal partners to ensure fraud is stopped and fraudsters are caught.”
The fraud could be a major issue in the 2026 gubernatorial race as Walz seeks a third term.
Walz has said an audit due by late January should give a better picture of the extent of the fraud but allowed that the $1 billion estimate could be accurate. He said his administration is taking aggressive action to prevent additional fraud. He has long defended how his administration responded.
Minnesota’s most prominent Somali American, Democratic U.S. Rep. Ilhan Omar, has urged people not to blame an entire community for the actions of a relative few.
Dec. 30, 2025:
MINNEAPOLIS (AP) — Federal Homeland Security officials were conducting a fraud investigation on Monday (Dec. 29, 2025) in Minneapolis, Department of Homeland Security Secretary Kristi Noem said.
The action comes after years of investigation that began with the $300 million scheme at the nonprofit Feeding Our Future, for which 57 defendants in Minnesota have been convicted. Prosecutors said the organization was at the center of the country’s largest COVID-19-related fraud scam, when defendants exploited a state-run, federally funded program intended to provide food for children.
A federal prosecutor alleged earlier in December that half or more of the roughly $18 billion in federal funds that supported 14 programs in Minnesota since 2018 may have been stolen. Most of the defendants are Somali Americans, they said.
Minnesota Gov. Tim Walz said then that fraud will not be tolerated and that his administration “will continue to work with federal partners to ensure fraud is stopped and fraudsters are caught.”
Noem on Monday posted a video on the social platform X showing DHS officers going into an unidentified business and questioning the person working behind the counter. Noem said that officers were “conducting a massive investigation on childcare and other rampant fraud.”
“The American people deserve answers on how their taxpayer money is being used and ARRESTS when abuse is found,” U.S. Immigration and Custom Enforcement posted.
The action comes a day after FBI Director Kash Patel said on X that the agency had “surged personnel and investigative resources to Minnesota to dismantle large-scale fraud schemes exploiting federal programs.”
Patel said that previous fraud arrests in Minnesota were “just the tip of a very large iceberg.”
President Donald Trump has criticized Walz’s administration over the fraud cases to date.
In recent weeks, tensions have been high between state and federal enforcement in the area as the Trump administration’s immigration crackdown focused on the Somali community in the Minneapolis-St. Paul area, which is the largest in the country.
Among those running schemes to get funds for child nutrition, housing services and autism programs, 82 of the 92 defendants are Somali Americans, according to the U.S. Attorney’s Office for Minnesota.
Walz spokesperson Claire Lancaster said that the governor has worked for years to “crack down on fraud” and was seeking more authority from the Legislature to take aggressive action. Walz has supported criminal prosecutions and taken a number of other steps, including strengthening oversight and hiring an outside firm to audit payments to high-risk programs, Lancaster said.
