US freezes Minnesota’s child payments after claims of widespread fraud

(MENAFN) The US government has suspended all childcare payments to Minnesota following allegations of extensive fraud, as stated by reports. Deputy Secretary of Health and Human Services Jim O’Neill confirmed the move, which comes after claims that millions of taxpayer dollars were funneled to fraudulent daycares over the past decade.

“We have frozen all child care payments to the state of Minnesota,” O’Neill said on X, also outlining three additional measures taken in response to the alleged fraud.

O’Neill added that the “Defend the Spend” system has been activated for all Administration for Children and Families (ACF) payments, requiring justification and proof of receipt before any funds are released. He also demanded a full audit from Minnesota Governor Tim Walz, covering attendance records, licenses, complaints, inspections, and investigations of the centers involved. Additionally, a dedicated fraud-reporting hotline has been established.

ACF Assistant Secretary Alex Adams noted that the office provides Minnesota with $185 million in childcare funding annually, benefiting around 19,000 children. “Any dollar stolen by fraudsters is stolen from those children,” Adams said.

The probe was sparked by a video posted by YouTuber Nick Shirley, who alleged a large-scale fraud operation involving Somali-run childcare centers, estimating more than $110 million in fraudulent claims. In response, Department of Homeland Security Secretary Kristi Noem announced a “massive investigation on childcare and other rampant fraud,” sharing footage of agents questioning business operators.

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