Minnesota daycare centres ‘fraud’ row: Claims of kickbacks trigger major FBI, DHS probe

The FBI and the DHS have ramped up their resources in Minnesota after a YouTube video alleged massive frauds at the state’s daycare centres being run by Somalis. Republican leaders are also slamming Governor Tim Walz about his inaction regarding the alleged fraud.

DHS raids businesses in Minnesota as part of investigations into alleged fraud.
DHS raids businesses in Minnesota as part of investigations into alleged fraud.(X/@DHSgov)

The number of federal officers in Minnesota is rising as investigations into the alleged daycare centre frauds intensify. This surge of officers in the state is coming in the wake of a viral video which claims that several daycare centres in the state are receiving funds from the state’s Child Care Assistance Program without being actually operational.

Minnesota State Representative Kristin Robbins on Tuesday shared a video on X by a news portal which claimed that it showed a daycare worker paying kickbacks to parents who were allegedly involved in the scheme.

Sharing the video, Robbins wrote, “It the same playbook used for years – now also seen in charges in autism centers & credible whistleblower reports of kickbacks in transportation & Adult Day Care. @Tim_Walz & DHS have ignored obvious red flags & patterns.”

Both Department of Homeland Security Secretary Kristi Noem and FBI Director Kash Patel have announced that operations in the state are being increased. This move follows a viral video posted by YouTuber Nick Shirley which claimed that he has discovered fraud worth more than a $100 million by Somali residents in the state.

The DHS has also been posting videos of their visits to several businesses in the state, claiming, “Our investigative agents are conducting a massive operation to identify, arrest, and remove criminals who are defrauding the American people. We will root out this rampant fraud plaguing Minnesota.”

The video has received more than 1.5 million views on YouTube and was also shared by the likes of US Vice President JD Vance and Elon Musk.

On Monday, the Minnesota Department of Children, Youth, and Families commissioner, Tikki Brown, said in a press conference that state authorities are taking the allegations seriously.

“While we have questions about some of the methods that were used in the video, we do take the concerns that the video raises about fraud very seriously,” Brown was quoted as saying by KARE, a CNN affiliate.

Noem posted on social media that officers were “conducting a massive investigation on childcare and other rampant fraud.” Patel said the intent was to “dismantle large-scale fraud schemes exploiting federal programs.”

CNN spoke to a law enforcement official, who claimed that DHS agents on Monday visited around 30 businesses in Minneapolis because of Shirley’s video.

Quality Learning Center – in the eye of the storm

KARE spoke to a manager at Quality Learning Center, one of the daycare centres Shirley alleged is closed but still receiving funds. The manager, Ibrahim Ali, told the news outlet that Shirley had reached the centre when it was scheduled to remain closed.

“There’s no fraud going on whatsoever,” Ali told the outlet.

The video had also highlighted the misspelling on a signboard outside the establishment, where ‘Learning’ was spelt as ‘Learing’. When asked about this, Ali told the outlet that it was a mistake by a sign maker and will be fixed soon.

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