Minnesota child care centers at the center of widespread fraud allegations, fueled by a viral video, were operating as expected when investigators visited, the state Department of Children, Youth, and Families (DCYF) said Friday.
“Children were present at all sites except for one – that site was not yet open for families for the day when inspectors arrived,” the agency said in a news release. Investigators gathered evidence and initiated further review, noting that the investigation into four centers is ongoing.
Following a viral video, federal resources have surged to investigate alleged child care fraud in Minnesota. CNN's Whitney Wild had a chance to question YouTuber Nick Shirley about his claims. pic.twitter.com/8AfB1B7MpE
— Anderson Cooper 360° (@AC360) December 31, 2025
Who is behind the viral video prompting the investigation?
The issue was further fueled by a viral 42-minute video created by YouTube personality Nick Shirley, where he alleged to have discovered mass fraud in Somali-operated child care centers. Shirley gained fame through various videos promoting anti-immigrant and anti-Muslim ideologies; this video was uploaded a day after Christmas.
As of Friday, the video had 3 million views and more publicity came after the video went viral on page reposts from prominent individuals like Vice President JD Vance or former head of the Department of Government Efficiency Elon Musk. The video led to increased immigration enforcement actions, frozen federal dollars, along with escalated attacks on the state’s Somali population from President Donald Trump.
What has the state Department of Children, Youth, and Families said about the allegations?
DCYF warned that the use of “unvetted or deceptive claims and tip line misuse can harm investigations, pose risks to families, providers, and employers, and has contributed to problematic discourse about Minnesota’s immigrant population.”
As the agency explained, it is dedicated to conducting fact-based evaluations to prevent fraud, safeguard children, help families, and avoid disruptions to communities depending on necessary child care services.
How did federal agencies respond to the allegations?
After the video came to light, the U.S. Department of Health and Human Services froze all child care payments to the state of Minnesota while the FBI and the Department of Homeland Security investigate allegations of fraud. CNN contacted the two agencies for comment on the initial findings from the state.
HHS chose not to comment directly on the state’s findings but reiterated that a stronger verification process is necessary because of fraud concerns. “The onus is on the state to provide additional verification,” HHS Deputy Assistant Secretary for Media Relations Andrew Nixon stated.
What actions has the Trump administration taken regarding Minnesota child care funding?
Trump administration representatives have until next Friday to provide verifying information about providers and parents who receive federal child care assistance, according to an e-mail from DCYF shared with the AP.
HHS Secretary Jim O’Neill also announced the agency will require justification or proof through receipt or picture documentation for every payment to states under the department’s administration for children and families.
.@HHS_Jim: “We are not going to spend money on Minnesota until we’re confident there is no fraud.” pic.twitter.com/6TQJ8dgec3
— HHS Rapid Response (@HHSResponse) January 2, 2026
What child care program is at the center of the fraud allegations?
The allegations pertain to the Child Care Assistance Program (CCAP) for the year 2025. As reported, the budget allocated to the mentioned child care centers within the video varied from $470,000 to $3.6 million throughout fiscal year 2025. The amount exceeded $17 million.
It should be noted that CCAP does not accept applications for financial assistance directly from child care centers. Rather, eligible working parents or other eligible caregivers with limited income apply for financial assistance from the state directly and then are provided funds for payment to the child care centers. One of the centers that appear in the video has been shut down since the year 2022.
How does this scandal fit into the broader history of fraud cases in Minnesota?
Charges are the tip of the iceberg in terms of fraud related to social services provided by the state. There have been other programs that provide meals to children in need during the pandemic and other forms of assistance to needy families.
Causing even greater controversy are instances which have involved Somali communities. For example, a alleged scam involving a non-profit organization named Feeding Our Future has involved federal prosecutors accusing the organization of misrepresenting the provision of meals for needy children during the COVID-19 pandemic. Federal charges were filed against scores of individuals primarily from the Somali community since 2022.
How has the viral video affected public perception and policy?
The video has focused the spotlight on the Somali community in the state of Minnesota as well as care providers, spurred frozen federal funds, as well as shaped the rhetoric that has emerged from the politicians. However, DCYF stated that unsubstantiated allegations were likely to disrupt the investigation that was underway in the immigrant communities. Federal as well as local authorities in the state of Minnesota are in the process of reviewing the evidence.
