Minnesota Daycares at the Heart Widespread fraud allegations fueled by a viral video were working as expected when investigators visited, the state Department of Children, Youth and Families said in a news release Friday.
“Children were present at all sites except one – this site was not yet open to families on the day inspectors arrived,” the agency said.
The agency gathered evidence and launched a deeper review, noting that the investigation at four centers was ongoing, the report said.
This report comes days after YouTube content creator Nick Shirley, who has previously created anti-immigrant and anti-Muslim videos, posted a viral video in which he claimed to have uncovered widespread fraud at Somali-run daycares.
The video, which includes limited evidence of the creator’s allegations, received 3 million views on YouTube as of Friday and gained traction after being reposted by Vice President JD Vance and former Department of Government Effectiveness chief Elon Musk.
The conservative activist’s 42-minute video released the day after Christmas quickly spread, prompting increased immigration controls, a freeze in federal funds and even harsher rhetoric from President Donald Trump against the Somali community.
The state Department of Children, Youth and Families warned Friday that distribution of “unverified or misleading claims and misuse of tip lines may interfere with investigations, create safety risks for families, providers and employers, and have contributed to harmful discourse about Minnesota’s immigrant communities.” »
Minnesota lawmaker: Families in limbo after WH freezes child care payments
“DCYF remains committed to fact-based reviews that stop fraud, protect children, support families, and minimize disruption to communities that rely on these essential services,” the report said.
After the video was released, the Department of Health and Human Services froze all child care payments made to the state for review, while the FBI and Department of Homeland Security investigate allegations of fraud. CNN reached out to the FBI and DHS on Friday for comment on the state’s preliminary findings.
HHS, through a spokesperson, did not respond directly to the state’s findings Friday and reiterated its call for a more robust vetting process to prevent fraud. “It is incumbent on the state to provide additional verification,” said Andrew Nixon, HHS deputy assistant secretary for media relations.
The Trump administration has given Minnesota officials until next Friday to provide verification information on providers and parents who receive federal child care funds, according to a Friday email DCYF sent to child care providers shared with The Associated Press. CNN has reached out to HHS and state officials for clarification.
In addition to requiring a state audit of Minnesota child care centers featured in the video, Health and Human Services Secretary Jim O’Neill said the agency will now require justification and receipts or photographic evidence for all payments to states from the department’s Children and Families Administration.
The allegations made in the controversial video concerned funds for the Child Care Assistance Program – known as CCAP – for 2025.
The report shows the amount of CCAP funding the centers in the video received in fiscal year 2025, ranging from $470,000 to $3.6 million, and totaling more than $17 million.
A center mentioned in the video has been closed since 2022, the report said.
CCAP does not accept applications directly from daycares. Instead, working parents and other eligible caregivers who earn less than the program’s income limit apply directly to the state for assistance, which is paid to the child care center.
The accusations made in the video were the latest in a series of fraud scandals involving state social services programs that provided meals to needy children during the pandemic, Medicaid housing assistance and other safety nets benefiting needy families.
The scandals date back nearly a decade and include allegations of fraud within the Somali community focused on Feeding Our Future, a nonprofit that prosecutors say falsely claimed to provide meals to children in need during the Covid-19 pandemic. Federal charges have been filed against dozens of people – mostly Somalis – starting in 2022.
