Minnesota’s Federal Childcare Funding Suspended as Trump Administration Expands Fraud Investigations

Trump administration freezes $185 million in Minnesota childcare funds, orders audits of Somali American immigration cases

MINNEAPOLIS — The administration of President Donald Trump has suspended federal childcare funding to Minnesota and ordered audits of immigration cases involving Somali Americans, escalating a fraud crackdown that critics say disproportionately targets immigrant communities in the state with the nation’s largest Somali population.

• The Department of Health and Human Services froze $185 million in childcare aid for low-income families statewide, citing alleged fraud.
• DHS launched audits of Somali American immigration cases that could lead to denaturalization if fraud is found.
• The actions followed viral claims by a conservative YouTuber alleging widespread daycare fraud in Minneapolis.

HHS announced the funding freeze Tuesday after a video by conservative YouTuber Nick Shirley accused Somali American–run daycare centers in Minneapolis of orchestrating as much as $100 million in fraud. The video drew 127 million views on X and heavy amplification on Fox News.

Jim O’Neill, deputy secretary of HHS, said the suspension would remain in place as federal officials investigate. “Serious allegations that the state of Minnesota has funnelled millions of taxpayer dollars to fraudulent daycare centres across the state over the past decade” compelled the action, he said. “We have turned off the money spigot and we are finding the fraud.”

Gov. Tim Walz condemned the move as political. “This is Trump’s long game. We’ve spent years cracking down on fraudsters. It’s a serious issue – but this has been his plan all along,” Walz wrote on X, accusing the White House of “politicising the issue to defund programmes that help Minnesotans.”

Separately, the Department of Homeland Security said it will audit immigration cases involving Somali Americans to identify potential fraud, a process that could result in revocation of citizenship. “Under U.S. law, if an individual procures citizenship on a fraudulent basis, that is grounds for denaturalization,” DHS spokesperson Tricia McLaughlin said in a statement first reported by Fox News and later shared by the White House. McLaughlin added in a Fox News interview that hundreds of investigators were also examining businesses in Minneapolis, saying, “We believe that there is rampant fraud, whether it be daycare centres, healthcare centres, or other organisations.”

Federal prosecutors allege that as much as $9 billion in Minnesota social assistance funding has been stolen since 2018, including $300 million allegedly misappropriated from a state children’s nutrition program during the COVID-19 pandemic. According to the Trump administration, federal charges have been filed against 98 individuals, 85 of whom are described as “of Somali descent.” The nutrition program case became public in 2022 but has drawn renewed attention from conservative politicians and activists this year.

FBI Director Kash Patel said Tuesday on X that the bureau was “aware of recent social media reports” and had “surged personnel and investigative resources to Minnesota to dismantle large-scale fraud schemes exploiting federal programmes.”

The swift federal actions arrive amid heightened tensions in Minneapolis, where demonstrators rallied in December against reported immigration operations targeting the Somali community. Community advocates and state officials warn the HHS freeze could hit low-income families across Minnesota immediately, regardless of whether they have any connection to alleged wrongdoing, while audits raise fears in immigrant neighborhoods about denaturalization and widening surveillance.

Shirley’s video helped propel the allegations to national attention, but some U.S. media outlets have questioned its credibility. The administration’s moves nonetheless mark one of the most far-reaching uses of fraud claims to justify both funding suspensions and immigration case reviews in a single state — a pairing that is likely to intensify legal, political and community fights in the weeks ahead.

Neither HHS nor DHS provided a timeline for the funding freeze or the immigration audits. Minnesota officials say they are reviewing options to restore childcare dollars while continuing fraud enforcement efforts the state says it has pursued for years.

By Ali Musa
Axadle Times international–Monitoring.