Investigation into Minnesota Child Care Fraud Takes Center Stage
Recent developments in Minnesota’s child care system have turned the spotlight on potential fraud after a CBS report confirmed alarming allegations. Claims of inflated enrollment figures and misappropriated federal funding at ABC Learning Center have led to broader scrutiny of child care facilities across the state.
Conservative journalist Nick Shirley ignited this investigation with a video released on December 16, 2025. In his footage, Shirley visited various Minneapolis child care centers, including ABC Learning Center, where he witnessed a stark contrast between reported attendance and reality. “There’s emptiness where there should be dozens of kids,” he said, noting that while the center claimed to care for 40 children, only four were present during his visit.
In an attempt to counter Shirley’s claims, CBS highlighted the actual presence of four children at the facility. However, critics argue this only reinforces the suspicion that the center may be billing the government for many more children than are actually there, raising concerns about the integrity of the funding process.
Shirley’s statement on social media made the implications clear: “Babysitting 4 kids while the federal government pays you for 40 KIDS is FRAUD.” Over three years, ABC Learning Center has received nearly $3 million in subsidies, demonstrating a potential misuse of taxpayer funds.
The financial stakes in this situation are significant. ABC Learning Center is part of the Minnesota Child Care Assistance Program (CCAP), which relies on tax dollars to provide child care for low-income families. Yet, a lack of oversight raises questions about the efficacy of the program and its vulnerability to fraudulent activities. The yearly funding of nearly $1 million does not align with the observed low attendance, prompting alarming concerns about accountability.
In response to Shirley’s revelations, the Department of Health and Human Services (HHS) quickly halted all federal child care funding to Minnesota on December 19, 2025. HHS Deputy Secretary Jim O’Neill identified “blatant fraud” as a critical issue, indicating an urgent need to investigate misuses of taxpayer dollars. “We have turned off the money spigot and we are finding the fraud,” he stated. The funding freeze impacts 23,000 children, creating immediate challenges for families who depend on subsidized child care.
Minnesota Governor Tim Walz criticized the federal action, suggesting it is politically motivated. “This is Trump’s long game,” he claimed, framing the funding freeze as an ideological attack. Nonetheless, critics contend that the data speaks loudly, and the discrepancies between reported capacity and actual attendance cannot be ignored.
The CBS segment, which aired in early January 2026, reinforced the issues raised by Shirley. While the daycare provided surveillance footage of children arriving, it only confirmed the presence of four children during Shirley’s visit. Local resident and investigator David emphasized the implications of this finding: “Even if there were four children—it proves the problem.” The stark difference between the registered capacity and the small number of children present raises serious questions about funding appropriateness.
Ahmed Hasan, director of ABC Learning Center, asserted that they are operating normally and cooperating with audits. He noted, “We gave them two months of attendance” to federal inspectors. However, discrepancies between licensed capacity and observed children continue to fuel skepticism. Local records indicate that the facility has the potential to accommodate many more children than those who actually showed up, leading to further concerns regarding the legitimacy of the operations.
This issue is not isolated to ABC Learning Center. Other facilities, particularly in Somali-majority neighborhoods, have also faced scrutiny. Investigative visits revealed locked doors and empty parking lots during operational hours, indicative of possible fraud. The Minnesota Department of Human Services acknowledged that some centers, such as Quality Learning Center, have faced as many as 95 violations between 2019 and 2023.
Federal investigators estimate that fraud related to various state-run benefit programs, including child care subsidies, could surpass $1 billion. This pattern mirrors past fraud convictions in Minnesota, highlighting a systemic issue that raises red flags about the handling of taxpayer funds.
In response to ongoing troubles, the Administration for Children and Families (ACF) implemented stricter controls on funding. Future payments now require verified attendance records and may necessitate photographic proof. This policy is set to apply across the nation, as the federal government seeks to regain control over how taxpayer money is utilized.
As these policies unfold, legitimate daycare providers must now confront increased pressure to document attendance meticulously. Meanwhile, low-income families who depend on CCAP face a precarious situation, risking loss of access to child care if fraud issues remain unresolved.
Community tensions are escalating as well. Employees at ABC Learning Center reported feeling threatened and intimidated following the viral video. One staff member expressed fear during a visit by investigators, saying, “We thought they were ICE. We were scared to open the door.”
Despite defenses from some proponents of facilities like ABC Learning Center, the core issue persists: taxpayer dollars are being used for unverified services. The federal response—cutting off funds—signals a shift toward accountability and away from blind trust in the system.
In an ironic twist, CBS’s attempt to refute Shirley’s claims might have only served to validate them. Observing four children in a facility meant for 40 raises serious questions about the nature of the funding and its administration. Shirley’s observations resonate with growing skepticism toward institutions that handle public resources.
“Mainstream media has ZERO credibility,” he noted in a tweet, directly challenging the narrative that emerged from the CBS report. “They just proved me right.”
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