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WASHINGTON, D.C.—In a press statement released today, HHS Deputy Secretary Jim O’Neill, alongside Assistant Secretary Alex Adams who oversees the Administration for Children and Families (ACF), announced the immediate freeze of all federal child care payments to Minnesota and nationwide activation of the Defend the Spend system amid allegations of widespread fraud in child care programs following the an investigative report by Nick Shirley.

“Let me be crystal clear,” O’Neill said, “ACF expects every state to uphold the highest standards of oversight, monitoring, and accountability for federal dollars. Minnesota is no exception. We’re committed to holding bad actors accountable. Regardless of rank or office, anyone who’s involved in perpetrating this fraud against the American people should expect to be prosecuted to the fullest extent of the law.”

The federal government provides Minnesota with $185 million annually through the Administration for Children and Families (ACF) to support child care for approximately 19,000 children, including infants and toddlers.

Following a conversation with Minnesota’s Child Care Services Office director, Cindi Yang, who could not confirm the extent of the fraud, HHS announced on Tuesday, December 30, the following actions effective immediately:

1. Activated the Defend the Spend system for all ACF payments. Starting today, all ACF payments across the United States will require a justification and a receipt or photo evidence before any send money is sent to a state.
2. HHS sent a demand letter to MN Gov Tim Walz for a comprehensive audit of all the centers identified in Nick Shirley’s investigative report. This includes attendance records, licenses, complaints, investigations, and inspections.
3. Launched a dedicated fraud-reporting hotline and email address at https://childcare.gov. Whether you are a parent, provider, or member of the general public, HHS wants to hear from you.

The “Defend the Spend” initiative, led by the Trump administration’s Department of Government Efficiency (DOGE), defends increased oversight and justification for federal funds to curb waste and fraud, requiring agencies and grantees to provide detailed descriptions, receipts, and budget alignment before payments are released.

Allegations of widespread fraud of Somali-run Minnesota’s childcare centers

The federal government has unleashed the full force of the law against corruption in Minnesota. Both elected and unelected officials are in the crosshairs of Federal investigators who have ramped up scrutiny of child care centers in the state following a viral video alleging widespread fraud.

The 42-minute video, posted by YouTuber Nick Shirley on X, claims to uncover more than $110 million in fraudulent claims processed in a single day through centers primarily serving the Somali community in Minneapolis. Video footage shows empty buildings billed as bustling day cares, interviews with local residents questioning enrollments, and records of funds diverted to adult services or nonexistent programs.

Shirley, a 23-year-old independent journalist, conducted on-site visits and reviewed public documents, highlighting what he described as systemic abuse in Minnesota’s welfare system. The X post has garnered over 128 million views since December 26, drawing attention from the Speaker of the House Mike Johnson, FBI Director Kash Patel, and HHS Secretary Robert F. Kennedy, Jr.

FBI and Homeland Security agents have surged into the Minnesota this week, conducting door-to-door checks at suspected sites.

Minnesota has faced intense scrutiny for years over fraud in government-funded programs, including a $250 million scheme tied to the nonprofit Feeding Our Future during the COVID-19 pandemic.

As proven at trial, Feeding Our Future employees recruited individuals and entities to open Federal Child Nutrition Program sites throughout the state. These sites, created and operated by Aimee Bock, Salim Said, and other co-conspirators tied to the Somali community, fraudulently claimed to be serving meals to thousands of children a day within just days or weeks of being formed.

Bock and Said created and submitted false documentation, including fraudulent meal counts consisting of fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day. Feeding Our Future submitted these fraudulent claims to the Minnesota Department of Education (MDE) and then disbursed the fraudulently obtained Federal Child Nutrition Program funds to their co-conspirators involved in the scheme.

After a six-week trial, Bock was convicted on four counts of wire fraud, one count of conspiracy to commit wire fraud, one count of bribery, and one count of conspiracy to commit federal programs bribery. Said was convicted on one count of conspiracy to commit wire fraud, four counts of wire fraud, one count of conspiracy to commit federal programs bribery, eight counts of bribery, one count conspiracy to commit money laundering and five counts of money laundering. 

So far, 78 individuals have faced indictments, with 57 convictions and two acquittals.

Many defendants in the Feeding Our Future scandal are from Minnesota’s Somali immigrant community, which has drawn scrutiny in other probes into alleged HHS fraud.

Immigrant advocates have raised concerns that the intensified investigations unfairly target Somali immigrants, viewing these as part of broader immigration enforcement efforts or with a racial undertone.

Small Business Administration suspends all grants to Minnesota

SBA Administrator Kelly Loeffler on December 28 shared with an American conservative political commentator Benny Johnson, that she is cutting off ALL SBA grants to Minnesota, effective immediately. According to Johnson, Administrator Loeffler is “disgusted and sickened” by Nick Shirley’s expose of Somali fraud.

“The scope of this international scam is still unknown, likely in the billions. Pending further review, SBA is freezing all grant funding to the state in order to stop the rampant waste of taxpayer dollars and uncover the full depth of fraud,” SBA Administrator Loeffler told Johnson.

The Department of Labor is now going after the State of Minnesota for fraud

Benny Johnson reported on December 28 that Labor Secretary Lori Chavez-DeRemer shared with him that her department is currently investigating Minnesota for massive unemployment fraud, calling the operation “organized crime on a state scale.”

According to Johnson, Secretary Chavez-DeRemer is aware of the fake Somali businesses in Minneapolis and has uncovered “billions in fraudulent unemployment payments and COVID fraud.”

Secretary Chavez-DeRemer says a full-scale strike team will be sent to Minnesota to review the suspected mass unemployment fraud and to expect a full Department of Labor Inspector General Investigation as well.

“President Trump does not tolerate this criminal activity in our nation’s welfare system — and accountability is coming for everyone involved,” Secretary Chavez-DeRemer posted to X on Dec. 27.

FBI referring Somalis engaged in widespread fraud to ICE for denaturalization and deportation

FBI Director Kash Patel posted to X that he will be referring Somali immigrants who are complicit in fraud and organized crime to ICE regardless of citizenship status.

“The FBI is aware of recent social media reports in Minnesota. However, even before the public conversation escalated online, the FBI had surged personnel and investigative resources to Minnesota to dismantle large-scale fraud schemes exploiting federal programs. Fraud that steals from taxpayers and robs vulnerable children will remain a top FBI priority in Minnesota and nationwide,” FBI Dir. Patel posted to X on Dec. 28.

Alleged Minnesota Judicial Corruption

Multiple Minnesota judges are currently under fire for dismissing a recent $7.2M Medicaid fraud ring tied to Somali defendants:

• Judge Sarah West tossed out a guilty verdict by a jury related to Abdifatah Yusuf case.
• Judge Amber Brennan dropped the case against Yusuf’s wife Lul Ahmed.
• Judge Hilary Caligiuri let co-defendant Abdiweli Mohamud off the hook.

A Minnesota jury on August 12, 2025, convicted Abdifatah Yusuf on six counts of aiding and abetting theft by swindle.

In June 2024, Minnesota Attorney General Keith Ellison’s Medicaid Fraud Control Unit (MFCU) charged Yusuf for defrauding Minnesota’s Medicaid program via his agency, Promise Health Services, LLC. Operating without an office—using only a mailbox—the agency stole over $7 million by billing for unprovided services, falsified documentation, overbilling, undocumented claims, and kickbacks to recipients.

Yusuf funneled funds into a lavish lifestyle, transferring over $1 million to his personal account, withdrawing $387,000 in cash, and spending $22,000 on furniture, $42,000 at luxury auto dealers, and $80,000 at high-end clothing stores like Coach and Nordstrom.

“Stealing money meant for poor people’s healthcare and using it to buy luxury cars and designer clothes is as shameful and disgraceful as it gets,” said Attorney General Keith Ellison on the verdict. “Minnesotans believe in helping our neighbors, but we have no patience for fraudsters like Abdifatah Yusuf who abuse that generosity to enrich themselves.”

Assassination of former Minnesota House Speaker Rep. Melissa Hortman

Tim Walz’s appointee, Vance Luther Boelter, murdered Minnesota lawmaker, former House Speaker Rep. Melissa Hortman (D), on June 14, 2025, who allegedly tried to stop fraud in Minnesota — a bill to end undocumented adult immigrants’ eligibility for MinnesotaCare.

Boelter wrote in a letter addressed to FBI Director Kash Patel that Gov. Walz selected him to kill the Democratic lawmaker.

Minnesota Governor Tim Walz and Attorney General Keith Ellison linked to legislation that allegedly facilitated fraud

Minnesota Governor Tim Walz and current Minnesota Attorney General Keith Ellison, during their time in Congress, facilitated “payment rails” to Somalia. Then-Rep. Ellison in 2014 championed the Money Remittances Improvement Act (H.R. 4386), which streamlined regulatory oversight for family remittances by allowing federal reliance on state examinations. This law facilitated money transfers for immigrant families out of the country.

Federal investigations have uncovered massive fraud in Minnesota programs, with prosecutors estimating $9 billion stolen—largely by individuals of Somali descent—with billions allegedly sent overseas.

As of Dec. 27, no evidence directly linking Ellison or Walz to fraudulent channels has yet to be announced.

The Money Remittances Improvement Act of 2014 was signed into law by President Obama on August 8, 2014. It passed the House of Representatives on May 6, 2014, by voice vote (under suspension of the rules, with no recorded yea/nay count). It passed the Senate on August 1, 2014, by unanimous consent (no objections, no roll call vote).

John Boehner (R-OH) was Speaker of the House in 2014; whereas, Harry Reid (D-NV) was the Senate Majority Leader.

FBI Director Patel Alleges Biden-Era Cover-Up in Minnesota Fraud Cases

FBI Director Kash Patel has been quietly overseeing fraud investigations in Minnesota for months, alleging that probes launched under the Biden administration were deliberately sidelined according to a report from Emmy-winning investigative journalist Catherine Herridge on December 30.

Patel visited Minnesota in July to assess the investigations’ progress firsthand Herridge reported on X. He claims the cases, opened during the Biden administration, were “buried” amid sensitivities over potential connections to Biden associates. From late May through December 2025, the FBI maintained 16 active probes targeting about 32 healthcare and homecare providers suspected of fraud in Minnesota. Those efforts involved a broad coalition of agencies, including the DOH and HHS Inspector General, the Medicaid Fraud Control Unit, the IRS, postal inspectors, the Minnesota Attorney General, and the state’s Department of Education.

The investigations are now broadening beyond Minnesota, with authorities examining nationwide fraud networks. The FBI is deploying additional forensic accountants and data analytics experts to Minnesota to map out schemes comprehensively. Investigators are tracing funds to uncover the full extent of operations, while probing possible ties to elected officials and terrorist financing.

Alleged offenses span public corruption, various forms of fraud including cyber and healthcare variants, homecare abuses, and money laundering.

Author: Mario Lotmore