Minneapolis, MN – Minnesota has faced persistent fraud in its child care and social services programs since at least 2019, when state auditors first warned that weak oversight was allowing public money to be billed for services that were never provided, a problem that continues to generate investigations with limited public resolution.
fraThe rampant fraud was exposed this week by independent journalist Nicky Shirley.
The fraud centers on the Child Care Assistance Program, which is intended to help low-income families pay for daycare. According to state and federal investigators, some providers billed Minnesota for children who were not enrolled, did not exist, or for hours of care that were never delivered.
A report issued by the Minnesota Legislative Auditor in 2019 identified approximately $5 million to $6 million in proven fraud tied to the program over several years, while also warning that the true scope was likely higher because of inadequate controls at the Department of Human Services. Since then, investigators and media reports have alleged potential losses far beyond that figure, with some estimates placing annual fraud in the tens of millions of dollars.
FBI Director Kash Patel confirmed that the agency is not only aware of the fraud, but has been actively investigating and prosecuting cases.
The FBI is aware of recent social media reports in Minnesota. However, even before the public conversation escalated online, the FBI had surged personnel and investigative resources to Minnesota to dismantle large-scale fraud schemes exploiting federal programs. Fraud that steals from taxpayers and robs vulnerable children will remain a top FBI priority in Minnesota and nationwide. To date, the FBI dismantled a $250 million fraud scheme that stole federal food aid meant for vulnerable children during COVID. The investigation exposed sham vendors, shell companies, and large-scale money laundering tied to the Feeding Our Future network. The case led to 78 indictments and 57 convictions. Defendants included Abdiwahab Ahmed Mohamud, Ahmed Ali, Hussein Farah, Abdullahe Nur Jesow, Asha Farhan Hassan, Ousman Camara, and Abdirashid Bixi Dool, each charged for roles ranging from wire fraud to money laundering and conspiracy. These criminals didn’t just engaged in historic fraud, but tried to subvert justice as well. Abdimajid Mohamed Nur and others were charged for attempting to bribe a juror with $120,000 in cash. Those responsible pleaded guilty and were sentenced, including a 10-year prison term and nearly $48 million in restitution in related cases. The FBI believes this is just the tip of a very large iceberg. We will continue to follow the money and protect children, and this investigation very much remains ongoing. Furthermore, many are also being referred to immigrations officials for possible further denaturalization and deportation proceedings where eligible.
The issue has gained renewed attention amid broader federal prosecutions involving Minnesota social service programs, including the Feeding Our Future case, which led to dozens of indictments and convictions connected to the misuse of COVID-era meal funding. Federal prosecutors have said fraud across multiple programs in the state could total more than $1 billion.
Law enforcement agencies, including the FBI and the U.S. Attorney’s Office for the District of Minnesota, have continued to investigate daycare-related fraud. As of late this year, more than 60 child care centers participating in the assistance program remain under active investigation, according to officials familiar with the cases.
Oversight failures at the Minnesota Department of Human Services have been repeatedly cited by auditors and lawmakers, who have pointed to delayed enforcement actions, limited data-sharing, and insufficient fraud detection tools. State officials have said reforms are underway, though many investigations remain unresolved years after initial warnings were raised.
The issue has now reached Congress. House Oversight and Government Reform Committee Chairman James Comer announced an expanded investigation into fraud and alleged money laundering in Minnesota’s social services programs during Gov. Tim Walz’s administration. Comer has requested records from the U.S. Treasury and the Department of Justice, including Suspicious Activity Reports, and has sought transcribed interviews with Minnesota state officials as part of the probe.
In statements announcing the expansion, Comer accused state leadership of failing to act decisively after fraud concerns surfaced and said the committee is examining whether whistleblowers were ignored or retaliated against. Minnesota officials have not been charged in connection with the daycare fraud investigations.
Despite years of audits, prosecutions, and legislative scrutiny, Minnesota’s daycare fraud problem remains under investigation, with many cases still pending and oversight reforms continuing to evolve.