On December 30, 2025, the Trump administration announced it was immediately freezing all federal child care payments to Minnesota, citing concerns over widespread fraud in state-run programs. Deputy Secretary of Health and Human Services (HHS) Jim O’Neill made the announcement on X (formerly Twitter), describing the move as a response to “blatant fraud that appears to be rampant in Minnesota and across the country.” The decision affects approximately $185 million in annual funding from the Administration for Children and Families, which supports child care for around 19,000 low-income children in the state, including infants and toddlers.
The freeze was triggered in part by a viral video posted days earlier by conservative influencer Nick Shirley. In the video, Shirley visited several day care centers in Minneapolis, many operated by Somali immigrants, claiming they appeared empty or inactive despite receiving millions in public funds. He alleged up to $100 million in fraud at these facilities. O’Neill referenced the video directly, demanding that Minnesota Governor Tim Walz provide a comprehensive audit of the highlighted centers, including attendance records, licenses, complaints, investigations, and inspections.
Assistant Secretary Alex Adams emphasized the impact in a accompanying video, stating that “any dollar stolen by fraudsters is stolen from those children.” He noted a recent conversation with Minnesota’s child care services director, who could not confidently confirm whether the allegations were isolated or statewide.
This action follows a series of high-profile fraud cases in Minnesota, home to the largest Somali American community in the United States. The most notable is the Feeding Our Future scandal, where a nonprofit exploited a federally funded child nutrition program during the COVID-19 pandemic. Prosecutors described it as the nation’s largest pandemic-related fraud scheme, involving over $250 million in stolen funds. To date, dozens of defendants—most of Somali descent—have been charged, with 57 convictions secured. Ongoing investigations have expanded to other programs, including child care, housing, and autism services. A federal prosecutor recently estimated that half or more of the $18 billion in federal funds distributed through 14 Minnesota programs since 2018 may have been fraudulent.
The announcement came one day after Department of Homeland Security agents visited businesses in Minneapolis as part of an active fraud probe. Nationwide, HHS implemented new requirements: all payments through the Administration for Children and Families now need justification, receipts, or photo evidence. The department also launched a fraud-reporting hotline and email.
Governor Tim Walz, the 2024 Democratic vice presidential nominee, quickly criticized the decision on X. He acknowledged fraud as a “serious issue” that his administration has addressed for years through crackdowns and reforms but accused the Trump administration of politicizing it. “This is Trump’s long game,” Walz wrote. “He’s politicizing the issue to defund programs that help Minnesotans.” Walz pointed to an upcoming state audit due in late January, which he said would clarify the fraud’s scope, and defended his team’s aggressive prevention efforts.
U.S. Representative Ilhan Omar, a prominent Somali American Democrat from Minnesota, has previously urged against blaming the entire community for the actions of a few individuals involved in these schemes.
The funding freeze adds to escalating federal scrutiny of Minnesota’s social services under the Trump administration, which has highlighted the cases to criticize Walz and target immigration issues. While investigations into many fraud allegations began under the previous administration, the recent viral attention and federal actions have intensified the debate over accountability, oversight, and the potential impact on legitimate child care providers and families.