At a Glance
- HHS has frozen all federal child-care payments to Minnesota.
- New nationwide rule now demands a receipt or photo evidence before funds are released.
- The freeze follows a viral video and a surge of FBI resources targeting alleged fraud.
Why it matters: The halt stops state-funded programs that serve families, raising questions about oversight and fraud prevention.
The U.S. Department of Health and Human Services issued a dramatic announcement on Tuesday, saying it would stop all federal child-care payments to the state of Minnesota. The decision was prompted by a viral video that accused child-care facilities across the state of widespread fraud. The move comes amid a broader national effort to tighten checks on state spending.
HHS Response to Viral Video
Deputy Secretary Jim O’Neill and Assistant Secretary Alex Adams appeared in a statement and accompanying video posted to X. They explained that the agency would not only halt payments to Minnesota but also implement new requirements for child-care payments across the country. The policy change requires a justification and a receipt or photo evidence before the Administration for Children and Families can send money to any state.
O’Neill added an hour later that funds will be released only when states prove they are spent legitimately. The agency’s statement declared:
> “We have turned off the money spigot and we are finding the fraud.”
The announcement signals a hardening stance against alleged misuse of federal funds, emphasizing the need for transparency and accountability.
Political Reactions
A spokesperson for Governor Tim Walz-the 2024 Democratic nominee for vice president-issued a statement defending the governor’s long-standing anti-fraud efforts. The spokesperson said:
> “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 also criticized the freeze as an overreach that harms families reliant on child-care services. HHS did not respond to inquiries about the exact amount of money being frozen for Minnesota, leaving the financial impact unclear.
The timing of the announcement follows a public statement from FBI Director Kash Patel on Sunday. Patel said the bureau had “surged” resources to Minnesota to investigate fraud claims. The investigation was intensified before the video by right-wing influencer Nick Shirley went viral over the weekend, claiming to show non-operational child-care facilities receiving state and federal funds.
Background on Fraud Investigation
The FBI’s investigation has largely focused on Somali immigrants in Minnesota. The Justice Department has been probing fraud involving members of the state’s Somali community for years. In 2022, federal prosecutors under the Biden administration announced indictments in a $250 million scheme to defraud a federally funded child nutrition program.
As of November, prosecutors had charged 77 people. The indictment described Aimee Bock, a white individual, as the mastermind of the operation. A jury convicted Bock in March, reinforcing the seriousness of the allegations.
The investigation’s scope and the number of individuals charged underscore the magnitude of the alleged fraud. The case illustrates how state and federal programs can be targeted by coordinated schemes, prompting agencies like HHS to adopt stricter controls.
| Charge | Defendant | Outcome |
|---|---|---|
| Fraud in child nutrition program | Aimee Bock | Convicted (March) |
| 77 individuals charged | Various Somali community members | Pending |
| $250 million scheme | Multiple defendants | Under investigation |
The table summarizes the key facts of the investigation, highlighting the breadth of the alleged fraud and the legal responses.
Key Takeaways
- HHS has frozen all federal child-care payments to Minnesota.
- New nationwide rules now require evidence before state payments.
- The freeze follows a viral video and a surge of FBI investigations targeting a $250 million fraud scheme.
The decision by HHS marks a significant escalation in the fight against alleged fraud in child-care programs. Families across Minnesota may face disruptions, while the federal government seeks to ensure that public funds are used appropriately.
