Escalating Investigations into Fraud at Somali-Run Child Care Centers
Federal authorities are aggressively targeting child care centers run by members of the Somali immigrant community following allegations of widespread fraud. According to the Department of Homeland Security (DHS), multiple states, including Minnesota and Washington, are experiencing increased inspections conducted by hundreds of agents. The investigations focus on daycare centers suspected of misappropriating taxpayer funds under the guise of legitimate operations.
This crackdown drew significant attention after independent journalist Nick Shirley released a viral video. In his footage, he alleged that numerous daycare centers appeared to be shuttered or unoccupied while still collecting full taxpayer funding. The video, which garnered over 80 million views, incited public outrage and prompted a robust federal response. Rep. Tom Emmer (R-MN) remarked, “It’s amazing to me that a 23-year-old journalist… found more in a matter of hours than [Minnesota Governor] Tim Walz and [Attorney General] Keith Ellison have found in seven years.” There is noticeable pushback against business owners as the investigations unfold, with fraudulent operators reportedly attempting to disguise their illegal activities as legitimate operations.
Background of the Investigations
Past investigations in Minnesota revealed considerable indicators of wrongdoing among several Somali-run daycare providers. Officials discovered instances of fictitious billing, where nonexistent children were claimed as enrolled. Alarming reports also suggest that in some cases, parents were allegedly bribed to take part in these fraudulent schemes. As of early 2024, at least 92 individuals have faced charges related to fraud in daycare programs, with 82 identified as Somali-Americans. So far, at least 60 of those charged have been convicted.
Financially, the scale of the alleged fraud is staggering, with estimates suggesting that more than $250 million may have been taken from taxpayers in Minnesota alone. This figure encompasses broader categories beyond child care, including claims related to autism therapy and COVID relief funds. In a related case, the nonprofit “Feeding Our Future” has been accused of orchestrating false claims across multiple businesses. Prosecutors allege operators established numerous shell companies with inflated budgets while possessing no staff or children enrolled to exploit federal assistance programs.
Federal Actions Intensify
In light of rising concerns and evidence of misconduct, the DHS and FBI have bolstered their investigations. FBI Director Kash Patel made it clear, stating, “Fraud that steals from taxpayers and robs vulnerable children will remain a top FBI priority in Minnesota and nationwide… This investigation very much remains ongoing.” Enforcement measures have included door-to-door visits to over 30 identified businesses in the Minneapolis-St. Paul metro area. Agents were seen entering facilities during operational hours, gathering evidence and interviewing employees. DHS acting director Todd Lyons emphasized the seriousness of the situation, saying, “You’ll always catch a few bad actors—this is different. This is systemic.”
In a twist, some business owners are reportedly responding to the investigations by attempting to fabricate legitimacy. According to a viral tweet and corroborated by investigators, certain daycare centers that previously showed inactivity have suddenly begun displaying new signage and staged classrooms, seemingly overnight. The tweet urged law enforcement to “MAKE ARRESTS BEFORE EVIDENCE IS DESTROYED.”
Impact on the Community
The fallout from the investigations is sweeping across Somali-American communities, creating a wave of anxiety and fear. In Washington, home to approximately 20,000 Somali immigrants, community leaders describe the scrutiny as unjust and economically damaging. Nafisa Samatar, executive director of the Somali Independent Business Alliance in Seattle, voiced concern, stating, “As a Somali and as a small business provider, we are really scared. People are afraid.” Following the DHS raids, Samatar and fellow leaders sought dialogue with Washington Governor Bob Ferguson to address their concerns.
Local leaders acknowledge the severity of the fraud allegations, but they also caution against condemning an entire community. Prominent Somali community leader Abdi Jama remarked, “Those are isolated incidents… it is being elevated just because of the rhetoric from the President and this administration.” Governor Ferguson, reflecting on these discussions, confirmed his commitment to both accountability and inclusion, while his office has worked alongside the Department of Children, Youth, and Families (DCYF) to implement tighter regulatory measures, including random audits and licensing reviews for child care grants.
Challenges in Oversight
Critics argue state systems failed to effectively catch the fraud prior to the surge of federal investigations and public scrutiny. Rep. Emmer criticized both Governor Walz and Attorney General Ellison for their inaction over the past seven years, claiming they ignored red flags while millions of taxpayer dollars went missing. In response, Minnesota’s Office of Management and Budget has frozen new funding to numerous childcare providers amid growing concerns about documentation and program integrity.
Simultaneously, the Small Business Administration (SBA), under Kelly Loeffler’s leadership, has paused federal disbursements to Minnesota due to approximately $430 million in suspected fraudulent claims tied to the Paycheck Protection Program. Loeffler stated, “SBA is pausing annual funding to Minnesota while we investigate.” One particularly troubling case involved cash kickbacks in the Star Autism fraud scheme, where families were bribed to falsely enroll children, allowing providers to bill for services that were never rendered. Such mechanisms are believed to replicate the deceptive practices seen in various childcare fraud cases, where operators allegedly colluded with parents to sign children in on paper, splitting state subsidies for nonexistent services.
Denials and Future Developments
While many facilities face allegations, not all operators accept the accusations. Ibrahim Ali, the manager of the Quality Learning Center—a center featured in Shirley’s video—defended his operations, asserting, “We’re open Monday through Thursday, 2 to 10 pm. We haven’t closed once during that period.”
Despite denials from some, federal investigations are unlikely to slow down. Vice President JD Vance weighed in, asserting that those engaging in fraudulent activities “are stealing both money and political power from Minnesotans.” Meanwhile, House Republicans are preparing legislation to enforce stricter oversight of federally funded child care services. DHS and FBI teams are expanding forensic audits in the affected states, with coordination from the Justice Department, suggesting that further arrests may be forthcoming.
Internal briefings within Homeland Security describe the ongoing fraud as “organized, deliberate, and partially coordinated,” raising alarms about the potential destruction of evidence. This urgency has spurred the government’s field operations. Thus, as investigations proceed, federal authorities are determined to confront what they describe as a “massive, ongoing scheme to defraud America’s taxpayers.”
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