On January 1, 2026, the U.S. Department of Homeland Security (DHS) initiated an investigation into alleged fraud at daycare centers in Minnesota, spurred by a video from independent journalist Nick Shirley. The video, which has gained significant attention on social media, claims that several daycare centers receiving public funds are not providing the services they claim.

Minnesota Department of Children, Youth, and Families Commissioner Tikki Brown acknowledged the concerns raised in the video, stating that while there are questions about the video's methods, the allegations of fraud are being taken seriously. State officials conducted site visits on the same day, revealing that two of the centers mentioned had already closed earlier in the year, although one later indicated it would remain operational.

A review by CBS News indicated that all but two of the daycare centers have active licenses, with state regulators inspecting all active locations within the last six months. One center, Sweet Angel Child Care, Inc., was inspected as recently as December 4. The review identified numerous citations related to safety and operational standards but did not find evidence of fraud.

These investigations are occurring amid broader allegations of a $9 billion fraud scandal linked to COVID-19 relief efforts in Minnesota. Governor Tim Walz and other officials have contested this figure, defending their management of the situation. Currently, 14 Medicaid-funded programs in Minnesota are under federal investigation, although child care is not among them.

Earlier reports indicated that individuals associated with the nonprofit Feeding Our Future misappropriated millions intended to support vulnerable children during the pandemic, with fraudulent payouts estimated at $250 million. This case has been described as the most significant COVID-era aid scam in the nation, leading to 78 arrests, predominantly involving members of the Somali American community, which is the largest in Minnesota.

Political responses have included statements from former President Donald Trump, who has characterized Minnesota as a center for fraudulent activities and has targeted the Somali community in his rhetoric. Additionally, Republican Representative Tom Emmer has called for the deportation of individuals involved in fraud, regardless of their citizenship status.

The situation raises critical questions about oversight and regulation in the childcare sector, particularly regarding the potential for exploitation of government programs designed to support vulnerable populations. As investigations continue, the implications for both the Somali community and the broader public trust in government-funded programs remain significant.