The Department of Health and Human Services said Tuesday that it is freezing all federal child care payments to the state of Minnesota in the wake of a viral video that alleged widespread fraud at child care facilities across the state.
In a statement and accompanying video on X, Deputy Secretary Jim O’Neill and Assistant Secretary Alex Adams said that in addition to halting all payments to Minnesota they were implementing new requirements for child care payments nationwide.
The statement said that all payments handled by the Administration for Children and Families — a component of HHS — will “require a justification and a receipt or photo evidence before we send money to a state.”
“We have turned off the money spigot and we are finding the fraud,” the statement said.
In a follow-up post more than an hour after that statement, O’Neill added that funds will be released “only when states prove they are being spent legitimately.”
A spokesperson for Gov. Tim Walz, who was the 2024 Democratic nominee for vice president, responded in a statement Tuesday saying the governor “has been combatting fraud for years.”
“Fraud is a serious issue. But this is a transparent attempt to politicize the issue to hurt Minnesotans and defund government programs that help people,” the spokesperson said.
HHS did not respond to an inquiry about exactly how much money is being frozen for Minnesota.
The announcement by HHS comes days after FBI Director Kash Patel said on Sunday that the bureau had “surged” resources to Minnesota to investigate claims of widespread fraud, insisting those steps were taken before right-wing influencer Nick Shirley’s video went viral over the weekend for purporting to show child care facilities that weren’t operational but were receiving state and federal funds.
The FBI’s fraud investigation has largely targeted Somali immigrants in Minnesota.
The Justice Department has been investigating fraud involving some members of Minnesota’s Somali community for years. Federal prosecutors in 2022 — under the Biden administration — announced initial indictments in what they said was a $250 million scheme to defraud a federally funded child nutrition program.
As of November, prosecutors had charged 77 people, and they described Aimee Bock, who is white, as the mastermind of the operation. A jury convicted Bock in March.
Corky Siemaszko contributed.
