DHS Launches Minnesota Fraud Probe After Viral Independent Investigation
Homeland Security and ICE officers are "conducting a massive investigation on childcare and other rampant fraud" in Minneapolis, Homeland Security Secretary Kristi Noem announced Monday. In an X post showing federal officers in Minnesota today, she said that there is "more coming."
The announcement follows an investigation by YouTuber Nick Shirley, who posted a nearly 45-minute video Friday alleging millions of dollars of additional fraud within Minnesota’s government-funded childcare and healthcare programs. Note: Shirley’s video follows a multi-year investigation in the state that has already led to multiple convictions and found more than a billion dollars in alleged fraud.
INSIDE THE INVESTIGATION
In the video – which has about 120 million views on X, as of Monday afternoon – Shirley visits multiple facilities alongside an independent investigator named David and claims to have uncovered $110 million of fraud in a single day.
One of those facilities, "Quality Learing Center" (which misspelled "learning" on their signage), reportedly received approximately $4 million in state funds to serve up to 99 children. However, the facility appeared closed mid-week when Shirley showed up.
The investigation by Shirley, who is conservative, does not clearly differentiate between fraudulent entities and legitimate businesses, as several locations blocked him from entering while he was filming. Vice President JD Vance, House Speaker Mike Johnson, Donald Trump Jr., and Elon Musk helped amplify Shirley’s report online.
Republicans have been putting pressure on Minnesota Governor Tim Walz (D) to step down amid the reports. A spokesperson for Walz told Fox News that the governor has spent years fighting fraud, including “launching investigations into these specific facilities, one of which was already closed.”
BIGGER PICTURE
FBI Director Kash Patel responded to the video Sunday, stating the agency had "surged personnel" to the state to "dismantle large-scale fraud schemes" prior to the reporting. Federal authorities began to raid facilities in Minnesota Monday.
Ongoing investigation: Earlier this month, a federal prosecutor estimated that $9 billion or more may have been stolen from 14 Minnesota-run programs since 2018. Prosecutors have so far charged more than 90 people accused of setting up companies that billed state and federal agencies millions of dollars for social services that were never provided.
More context: Law enforcement has been investigating a widespread fraud scheme in Minnesota for roughly five years – since it was first discovered that millions of dollars may have been stolen from a government program meant to feed hungry children during the pandemic.
Nearly 90% of the defendants charged so far are Somali Americans.
There are roughly 84,000 Somalis in the Minneapolis-St. Paul area, most of whom are citizens.
After reports of the fraud last month, President Trump threatened to end Temporary Protected Status for about 700 Somali immigrants. Federal officials also sent immigration officers to the Twin Cities.
Another perspective: In an essay for the Minnesota Reformer, a former fraud investigator who is Somali-American says economic desperation, unrecognized professional credentials, and the pressure to send remittances back home drive a “desire” for financial shortcuts. This combined with Minnesota’s weak oversight on providers creates a perfect opportunity for organized fraud, Kayseh Magan writes.
”What’s often lost is that Somalis are usually the victims in many of these cases — their identities have been stolen by providers, or they have been used by providers to get state money but never receive the services that they need — like desperately needed mental health services,” Magan notes.
Somalis in the diaspora send nearly $2 billion annually in remittances back home, which makes up an estimated 25% of Somalia’s GDP. Some of the fraudulent money is accused of reaching Al-Shabaab, the Al-Qaeda–linked militant group that controls parts of Somalia. Federal law enforcement has yet to confirm that during the current investigation.