WASHINGTON — In a decisive move that sent shockwaves through Minnesota’s political establishment, the Trump administration announced Tuesday that it has frozen all child care payments to the state amid mounting evidence of widespread fraud.
“We have frozen all child care payments to the state of Minnesota,” said Deputy Secretary Jim O’Neill alongside Administration for Children & Families Assistant Secretary Alex Adams in a video released Tuesday evening. “You have probably read the serious allegations that the state of Minnesota has funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade.”
Translation: the checks stop here.
According to HHS, the freeze is part of a broader crackdown on what officials described as blatant fraud not only in Minnesota, but nationwide. The department outlined three concrete actions now underway—because this administration doesn’t just issue statements, it actually does something.
First, HHS activated its “Defend the Spend” system, which requires states to justify funding requests with receipts or photographic evidence before taxpayer money is released. In other words, no proof, no payout. Simple concept, surprisingly effective.
Second—and this is where things get interesting—the crackdown directly follows the investigative work of journalist Nick Shirley. O’Neill confirmed that HHS officials identified individuals featured in Shirley’s viral videos and are now demanding a comprehensive audit of the daycare centers involved. That audit will include attendance records, licenses, complaints, inspections, investigations, and anything else that might explain where the money actually went.
The third action is the launch of a fraud reporting hotline and email address, allowing parents, providers, and members of the public to submit tips. Because when the government finally listens to citizens instead of bureaucrats, accountability tends to follow.
“We have turned off the money spigot and we are finding the fraud,” officials said bluntly.
Shirley’s reporting has highlighted numerous suspicious daycare and learning centers across the Minneapolis area, many of which appeared inactive despite receiving government funds. His work comes after a federal prosecutor revealed that Minnesota experienced at least $9 billion in fraud under Democratic Governor Tim Walz’s watch—an astonishing figure by any standard.
Earlier this month, reports also revealed that the state continued paying an accused Somali fraudster to operate assisted living homes while he awaited trial for his alleged role in the largest COVID-related fraud scheme in the country. According to First Assistant U.S. Attorney Joe Thompson, 14 Medicaid services in Minnesota are currently considered “high risk” for fraud.
Speaking recently, Shirley described what he found on the ground as almost impossible to miss. He noted daycare centers and autism centers with no children present, alongside transportation companies buried in snow as if they hadn’t operated in months.
“It’s so obvious,” Shirley said. “If you’re living in Minnesota, you have to raise your eyebrows and think, ‘What’s going on?’ A kindergartner could’ve figured out there was fraud going on.”
Governor Walz addressed the reports Tuesday, conceding that the state had been “taken advantage of” by fraudsters motivated by greed. But in a familiar move, he shifted blame to President Donald Trump, claiming the administration had let fraudsters out of prison—even as federal agencies are actively freezing funds, launching audits, and shutting the operation down.
The contrast couldn’t be clearer. While Minnesota leadership offers excuses and finger-pointing, the Trump administration is cutting off the cash, demanding answers, and protecting taxpayers.
At the end of the day, this is what accountability looks like: stop the money, expose the fraud, and put hardworking Americans first. And for families who actually need child care support—not fake daycares and shell operations—that’s a win worth applauding.
