Viral Video Sparks Federal Investigation into Minnesota Childcare Fraud
A viral exposé by citizen journalist Nick Shirley has ignited a massive federal investigation, revealing what officials now classify as one of the largest public assistance fraud scandals in Minnesota’s history. The video, which has exceeded 40 million views since its December 2023 release, uncovers numerous childcare centers across the state receiving millions in taxpayer funds while appearing abandoned or non-functional. This revelation has provoked bipartisan outrage and swift action from several federal agencies, including the FBI, the Department of Homeland Security, and the Small Business Administration (SBA).
Shirley’s video has gone viral, highlighted by a tweet stating, “Then why did I show up one day in Minnesota, all these daycares, no children, millions of dollars, we uncovered nearly $110M in fraud in ONE DAY?” This claim has turned into a rallying point, emphasizing the dire need for accountability in public fund management.
In the footage, licensed childcare centers like Mako Child Care Center and Future Leaders Early Learning Center appear desolate during operating hours. “I went to location after location,” Shirley explains in his video. “You’d never believe these buildings are supposed to be caring for kids. Empty parking lots. Lights off. No children.” Such stark imagery raises questions about the integrity of the system meant to protect and nurture children.
In response to Shirley’s findings, the SBA quickly froze $5.5 million in federal funding as of December 23, 2023, pointing to deep concerns over the integrity of Minnesota’s welfare oversight systems. Alongside this drastic measure, the SBA announced that $430 million in Paycheck Protection Program loans distributed in Minnesota are now under review due to suspected fraud.
Investigators are focusing on what they describe as a systematic operation involving sham childcare vendors, shell companies, and money laundering schemes. These fraud tactics have siphoned off hundreds of millions in federal assistance, largely from pandemic-related relief funds. SBA Administrator Kelly Loeffler stated, “Minnesota cannot be trusted to administer federal tax dollars. Its socialist welfare system has enabled fraud at an industrial scale, at the expense of honest Americans.”
The extent of the fraud aligns with broader concerns raised by the Department of Justice. They have reported that the Feeding Our Future scandal alone has led to 86 individuals being indicted. Among those are 78 indictments and at least 57 convictions already achieved, with several offenders now at risk of denaturalization or deportation due to the severity of their crimes.
FBI Director Kash Patel affirmed the agency’s commitment to pursuing additional criminal cases linked to this troubling trend. “The FBI believes this is just the tip of a very large iceberg,” Patel informed reporters. His determination to “follow the money” underscores the seriousness of the investigation and the aim to protect children from exploitation.
Evidence suggests the fraud operations involved legitimate-looking childcare centers that submitted reimbursement claims for nonexistent children. Observations reported by inspectors reveal instances like the Quality Learning Center in Brooklyn Park, which received substantial funding yet failed to meet basic operational standards. “An absence of children and staff” was noted during inspections at multiple visits, highlighting serious lapses in oversight.
Facing escalating criticism, Minnesota officials have been compelled to defend their record. Governor Tim Walz’s office asserts that he “has worked for years to crack down on fraud” and has invested in improved oversight. Nonetheless, state Republicans have deemed these efforts inadequate, arguing a lack of timely or decisive action.
Representative Tom Emmer remarked, “What Walz refused to address for seven years, Nick Shirley uncovered in one day. These centers were ghost towns. Meanwhile, millions were being funneled into their accounts with almost no questions asked.” His statement encapsulates the growing frustration towards leadership in the face of overwhelming evidence.
House Speaker Lisa Demuth echoed Emmer’s criticism, pointing out that no high-level officials have faced consequences for this scandal. “Gov. Walz has not fired a single agency commissioner. Democrats in the legislature blocked our attempts to tighten oversight. That’s how this happened in the first place.” This sentiment lends weight to accusations of systemic failure in regulatory processes.
The fallout from these fraud allegations has reverberated throughout Minnesota. Once regarded by some as a leader in welfare programs, the state is now branded as a “magnet for fraud.” Assistant U.S. Attorney Joseph Thompson warned, “Minnesota has become the destination for what we now call ‘fraud tourism’—people coming to our state purely to exploit its programs.” Such characterization should concern all who rely on the integrity of public assistance.
The mechanisms enabling this fraud appear alarmingly simplistic. Investigators report that operators set up shell companies disguised as vendors or community centers. These entities submitted fake claims asserting they had provided services to children, often in facilities where no children were present. The techniques used echo prior fraud cases linked to the $250 million Feeding Our Future scandal, indicating a dangerous precedent for similar schemes.
Attorney General Pam Bondi has committed her office to collaborating with federal task forces to untangle the web of fraud. “We are working hand-in-hand with state and federal authorities to continue unraveling this scheme—and we will continue charging and convicting those behind it. The people of Minnesota deserve better,” she asserted. Her firm stance reinforces the need for thorough action against fraudulent activities.
Shirley, the “citizen whistleblower” at the center of this controversy, maintains his resolve. In an interview after the viral sensation, he lashed out against mainstream narratives. “They say there have been 80 indictments. Great. Then why can I still walk into these buildings and find them empty and paid?” he demanded. “No kids, no teachers, just millions of your dollars going who knows where.”
In response to inquiries from CNN, only one of the facilities contacted upheld that its operations were legitimate. This claim sparked skepticism online, with a viral tweet remarking, “OMG, CNN got ANNIHILATED by Nick Shirley.” The backlash underscores the public’s desire for transparency and accountability.
The developments from this investigation continue to prompt scrutiny of welfare oversight not only in Minnesota but across the nation. With hundreds of millions lost and new indictments surfacing, this situation stands as one of the most significant failures of public trust in recent memory. FBI Director Patel emphasized, “The work is just beginning. We are peeling back layer after layer. Nobody is above the law—not in Minnesota, not anywhere.”
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