US freezes child care funding to all states amid fraud scandal – ABC

The federal probe was triggered by a YouTuber’s investigation of a massive Somali-run scam in Minneapolis

The US Department of Health and Human Services is halting federal child care funding to all states, pending proper paperwork, following a scandal over alleged widespread fraud in daycare centers in Minnesota, an agency official has told ABC News.

Federal funds will be released “only when states prove they are being spent legitimately,” the unnamed official stated on Wednesday, without providing details about the required documentation.

HHS spokesman Andrew Nixon clarified that even those “not suspected of fraudulent activity” have been asked to submit their “administrative data” for review.

Meanwhile, those “suspected” of fraud must provide additional records, including “attendance records, licensing, inspection and monitoring reports, complaints and investigations.”

“The onus is on the state to make sure that these funds, these federal dollars, taxpayer dollars, are being used for legitimate purposes,” Nixon told ABC News.

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Previously, the HHS froze all child care payments to Minnesota after reports alleged the state had funneled millions of taxpayer dollars to fraudulent daycares over the past decade. It also demanded a comprehensive audit from Minnesota Governor Tim Walz.

The Democrat has defended his administration, while lauding the state’s diverse makeup and large Somali community, and accusing US President Donald Trump of plotting against him.

“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. He’s politicizing the issue to defund programs that help Minnesotans,” Walz said.

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The scandal was triggered by conservative influencer Nick Shirley's investigation; he alleged a large-scale fraud scheme involving Somali-run childcare centers in a lengthy YouTube video, estimating over $110 million in fraudulent claims.

US Secretary of Homeland Security Kristi Noem announced a “massive investigation on childcare and other rampant fraud.” FBI Director Kash Patel said resources had been “surged” to Minnesota, warning that these cases were just “the tip of a very large iceberg” and that the perpetrators could face “denaturalization and deportation.”