The U.S. Department of Health and Human Services halted all federal child care payments to Minnesota after videos revealed licensed centers, many Somali-owned, appearing vacant during business hours despite receiving hefty subsidies like $1.9 million for one site with 99 slots.
Deputy Secretary Jim O’Neill cited serious fraud claims involving $185 million in annual funds, demanding audits, attendance logs, and launching a fraud hotline: ”Today we have taken three actions against the blatant fraud that appears to be rampant in Minnesota and across the country,” he stated in a video
Minnesota governor Tim Walz has received a demand letter from HHS ordering a full audit of potentially fraudulent childcare centers
Governor Walz called it a ploy to defund aid, accuses Trump of politicizing the issue, he wrote on X: “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.”
and skeptics noted legitimate home-based models, the move echoes Minnesota’s past scandals like the $250 million Feeding Our Future fraud, with DHS now raiding sites.