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Trump admin freezes all childcare payments to Minnesota after massive fraud allegations: ‘We have turned off the money spigot’

By Chris Nesi, NY Post

Published Dec. 30, 2025, 6:13 p.m. ET

The Trump administration is freezing all childcare payments to Minnesota and demanding a comprehensive audit of the state’s day care centers as a mushrooming billion-dollar fraud scandal engulfs the state’s human services department.

“We have frozen all child care payments to the state of Minnesota,” Deputy Health and Human Services Secretary Jim O’Neill wrote on X Tuesday afternoon, days after a viral video investigating alleged fraud at day care centers in the state drew national attention.

Minnesota has received $185 million in childcare payments from the Trump administration this year, according to Alex Adams, assistant secretary of HHS’ Administration for Children and Families.

The “funds will be released only when states prove they are being spent legitimately,” the HHS secretary said.

O’Neill said Minnesota has “funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade,” and outlined three actions the department has taken in an attempt to cut off the flow of exploitable funds.

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The first action will impose the requirement for “a receipt or photo evidence” for any payments made to states through the US Administration for Children & Families (ACF).

O’Neill said he has “demanded” Minnesota Gov. Tim Walz conduct a “comprehensive audit” of the centers highlighted.

“This includes attendance records, licenses, complaints, investigations, and inspections,” he writes.

He specifically cited YouTuber Nick Shirley’s video published on Friday, in which he visited day care centers across Minneapolis receiving millions in state funds that appeared to be closed or out of operation.

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“Whether you are a parent, provider, or member of the general public, we want to hear from you,” he said.

“We have turned off the money spigot and we are finding the fraud.”

So far at least $1 billion in fraud has been confirmed by authorities, and 92 people have been charged, 82 of whom are Somali immigrants, according to the US Attorney’s office, which warned the number could be as high as $9 billion.