Trump administration freezes Minnesota childcare funds over fraud claims 

United States President Donald Trump’s government has frozen childcare payments to the state of Minnesota and launched audits of immigration cases involving Somali Americans, intensifying a campaign that critics say uses fraud investigations to target immigrant communities.

The Department of Health and Human Services announced the freeze in funds on Tuesday in response to allegations by conservative YouTuber Nick Shirley, who claimed daycare centres operated by Somali Americans in the city of Minneapolis had committed up to $100m in fraud.

His video garnered 127 million views on X and received extensive coverage on Fox News.

Jim O’Neill, deputy secretary of health and human services, said the move addressed “serious allegations that the state of Minnesota has funnelled millions of taxpayer dollars to fraudulent daycare centres across Minnesota over the past decade”.

“We have turned off the money spigot and we are finding the fraud,” O’Neill said.

Minnesota has the largest Somali population in the US, and the $185m in frozen federal funds subsidise childcare for low-income families across the state.

Minnesota Governor Tim Walz immediately denounced the freeze as politically motivated.

“This is Trump’s long game. We’ve spent years cracking down on fraudsters. It’s a serious issue – but this has been his plan all along,” he wrote on X.

“He’s politicising the issue to defund programmes that help Minnesotans.”

The Department of Homeland Security simultaneously announced audits of immigration cases involving Somali Americans to detect fraud, a process that could lead to denaturalisation or revocation of citizenship.

“Under US law, if an individual procures ​citizenship on a fraudulent basis, that is grounds for denaturalization,” Tricia McLaughlin, a spokesperson for the department, said in a statement that was first reported by Fox News and reposted by the White House on social media.

In a separate interview, McLaughlin told Fox News that hundreds of investigators were also targeting businesses in Minneapolis. “We believe that there is rampant fraud, whether it be daycare centres, healthcare centres, or other organisations,” she said.

Federal prosecutors allege that some $9bn in funding for Minnesota social assistance programmes may have been stolen since 2018. They include $300m that was misappropriated from funds set aside for a state children’s nutrition programme during the COVID-19 pandemic.

Federal charges have been filed against 98 people, 85 of whom are “of Somali descent”, according to the Trump administration.

While the case became public in 2022, conservative politicians and activists have amplified it this year.

In late November, Trump accused “Somali gangs” of “terrorising” Minnesotans and ended their Temporary Protected Status, a programme that exempted Somalis from deportation to their war-torn country. He escalated the rhetoric a week later, saying Somalia “stinks” and calling Democratic Congresswoman Ilhan Omar – who is of Somali origin – “trash”.

FBI Director Kash Patel said on Tuesday that the agency was also investigating fraud allegations in Minnesota.

He said on X that “the FBI is aware of recent social media reports in Minnesota” and said the bureau had “surged personnel and investigative resources to Minnesota to dismantle large-scale fraud schemes exploiting federal programmes”.

Some US media outlets, however, have raised questions about the claims by Shirley, the YouTube.

An investigation published by CBS News on Tuesday into the Minnesota daycare centres featured in the YouTube video found that “all but two have active licences, according to state records, and all active locations were visited by state regulators within the last six months”.

The CBS investigation also found “dozens of citations related to safety, cleanliness, equipment, and staff training, among other violations, but there was no recorded evidence of fraud”.

Minnesota Department of Children, Youth, and Families Commissioner Tikki Brown told CBS that her office had “questions about some of the methods” used in Shirley’s video, but that they “do take the concerns that the video raises about fraud very seriously”.

Shirley’s allegations have started to affect Somali communities in other states.

Washington State Attorney General Nick Brown mentioned “home-based daycare providers being harassed and accused of fraud with little to no fact-checking” in a post on X on Wednesday.

“Showing up on someone’s porch, threatening, or harassing them isn’t an investigation. Neither is filming minors who may be in the home. This is unsafe and potentially dangerous behavior,” he said.