MINNEAPOLIS, Minnesota — A wave of political and media attention surrounding alleged child care fraud in Minnesota has been fueled by misleading claims, according to a detailed fact check published by The 19th and republished by News from the States.
The controversy began after a Dec. 26 viral video by right-wing YouTuber Nick Shirley alleged widespread fraud at Somali American–run day care centers in Minneapolis. Although the video was quickly debunked by state investigators, it triggered congressional hearings, a federal funding freeze targeting five Democratic-led states, and heightened scrutiny of Minnesota’s child care system.
State and federal records show that child care fraud has occurred in Minnesota, but not at the scale suggested online. A 2019 state investigation estimated several million dollars in fraudulent billing within the Child Care Assistance Program, leading to prosecutions and tighter oversight. Since then, Minnesota has increased audits, restructured licensing oversight, and criminalized kickbacks tied to enrollment referrals.
A 2025 federal inspector general report found payment errors in about 11 percent of sampled Minnesota child care payments in 2023, above the federal threshold, but experts stressed that improper payments do not automatically indicate fraud. Nationally, only seven states have exceeded the federal error benchmark since 2013.
Following the viral video, state inspectors conducted compliance visits at nearly all featured centers and found normal operations at most, with no fraud violations cited. Experts say the issue has been repackaged to suggest an epidemic, while Somali-run centers have faced harassment, threats, and safety concerns.
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