Fraud in Childcare Programs: A Closer Look at a Somali-Linked Center in Minnesota
A troubling case in Minnesota involves a Somali-linked childcare center that received $11.5 million in funding yet was found completely empty during several visits in 2024. This situation highlights ongoing issues within public assistance programs, drawing scrutiny from both investigators and independent watchdogs. The vacant center is just one part of a larger, systematic pattern of fraud affecting taxpayer-funded childcare aid.
Nick Shirley, a researcher who has investigated this center, described the conditions during his visits, stating, “There were no children, no employees—nothing. And yet it received over $11 million. More proof of the fraud being legit.” Such stark observations lead to serious questions about the verification processes in place to prevent such abuses.
This incident has surfaced amidst the backdrop of the Feeding Our Future scandal, unveiled in 2022, which involved significant misallocation of COVID relief funds designated for children’s meal programs. Following that case, concerns are mounting that similar shady practices may expand into childcare and education funding streams, perpetuating fraudulent activities.
Video evidence of the deserted site has circulated widely, igniting discussions around the vetting processes used for reimbursements under the Child Care Assistance Program (CCAP). One tweet encapsulated the outrage by noting, “It’s real and it is ROBBERY,” reflecting public sentiment as more people become aware of these discrepancies.
Financial records reveal that this particular center billed $11.5 million in just 16 months, without any proof of actual childcare services being provided. Data from the Minnesota Department of Human Services shows a significant rise—68%—in CCAP funds sent to Somali-operated centers, even as enrollment rates have stagnated or declined.
Investigators have conducted unannounced visits to several of these locations, consistently discovering empty facilities with locked doors. A state contractor shared insights, stating, “When we show up, the lights are off and the building’s closed. But the paperwork always checks out. That’s the issue—the backend of this funding relies on trust and loose verification.” This reliance has proven dangerous, as evidenced by the loopholes exploited during the Feeding Our Future scandal, where self-reported numbers and minimal oversight allowed fraudulent claims to flourish.
The Office of the Legislative Auditor’s February report corroborates these concerns. It revealed that over $100 million in funds was allocated to childcare centers from 2020 to 2023 without adequate verification of services. Alarmingly, 41% of flagged payments were linked to providers that failed inspections or couldn’t provide client records. Shirley, alongside a network of independent auditors, has worked to expose these alarming trends, often finding centers that are unstaffed or registered under questionable circumstances.
Shirley expressed his dismay, saying, “It’s worse than people think. You’re not just losing money—you’re allowing organized criminal operations inside your state funding systems.” As investigations continue, many state officials have yet to clarify how funds were approved for these centers, citing ongoing inquiries while insisting on increased scrutiny.
In a statement, the Department of Human Services announced an internal review of high-dollar providers flagged for irregularities. Despite this, there is growing frustration among residents and lawmakers, with many calling for more rigorous audits and potential collaboration with immigration authorities for centers found violating regulations.
The complexities of ownership structures in these childcare operations present additional challenges for enforcement. Many centers are owned by immigrants with indirect ownership through non-profits, complicating the auditing process and slowing criminal prosecutions. While 60 individuals faced charges in connection with the Feeding Our Future investigation, no mass charges have materialized in this latest childcare scandal.
A federal investigator noted, “These programs were built for speed and minimal barriers—especially with pandemic money. That’s where the fraud exploded. Now, people are using the same playbook in new areas.” In this case, the fraudulent funds derived from both state and federal sources, complicating the tracing of improper practices back to the center.
As the situation evolves, residents have started demanding answers about the extent of the problem and what measures will be taken to rectify it. “There’s an entire parallel economy being built on stealing public money,” lamented a local business owner, emphasizing the frustration felt by those trying to operate legitimately amidst rampant fraud.
The conversation around potential forensic audits of all large CCAP recipients has gained traction, along with proposals for real-time monitoring and tougher vetting processes. While state officials remain tight-lipped about the demographics of the flagged centers, available data indicates that Somali-run facilities receive an inordinate share of childcare subsidies compared to their actual enrollment percentages, raising more questions about the nature of this funding.
“When you see one center get $11 million and it’s shut tight every time you check, you’re not looking at a bookkeeping error,” Shirley remarked. “You’re looking at something that was built to steal.” As more evidence surfaces, the pressure increases on state and federal authorities to make necessary changes. The future of oversight remains uncertain, as both the public and whistleblowers demand accountability in these troubling cases.
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