Deputy Secretary of Health and Human Services Jim O’Neill announced the agency has paused child care payments in Minnesota due to alleged child daycare fraud.
Over the weekend, YouTuber Nick Shirley exposed the “Quality Lear[n]ing Center,” which has a license to have 99 children and receives millions of taxpayer money.
The video showed that the daycare, along with other facilities, is not operating, yet they receive so much money!
We have frozen all child care payments to the state of Minnesota.You have probably read the serious allegations that the state of Minnesota has funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade.Today we have taken three actions against the blatant fraud that appears to be rampant in Minnesota and across the country:1. I have activated our defend the spend system for all ACF payments. Starting today, all ACF payments across America will require a justification and a receipt or photo evidence before we send money to a state.2. Alex Adams and I have identified the individuals in @nickshirleyy’s excellent work. I have demanded from @GovTimWalz a comprehensive audit of these centers. This includes attendance records, licenses, complaints, investigations, and inspections.3. We have launched a dedicated fraud-reporting hotline and email address at https://childcare.gov Whether you are a parent, provider, or member of the general public, we want to hear from you.We have turned off the money spigot and we are finding the fraud.@ACFHHS @HHSGov
O’Neill and Assistant Secretary Alex Adams went into more detail:
O’NEILL: I’m HHS Deputy Secretary Jim O’Neill, I’m here with Assistant Secretary Alex Adams. Alex oversees the Administration for Children and Families. Intrepid journalists have made shocking and credible allegations of extensive fraud in Minnesota’s child care programs. We believe the state of Minnesota has allowed scammers and fake day cares to siphon millions of taxpayer dollars over the past decade.ADAMS: My office, ACF, provides Minnesota $185 million in child care funds each year. That money should be helping 19,000 American children, including toddlers and infants. Any dollar stolen by fraudsters is stolen from those children. Yesterday, I spoke directly with the Director of the Minnesota Child Care Services office. She could not tell me with confidence whether those allegations of fraud are isolated or whether there’s fraud stretching statewide.O’NEILL: Today, we have taken three direct actions against the blatant fraud that seems to be rampant in Minnesota. First, I have activated our defend the spend system for all ACF child care payments across America, starting today, we require a justification, receipt or photo evidence before we make a payment. Second, I have just signed and sent a demand letter to Governor Walz. I required a full 360 review of these centers. This includes attendance records, licenses, complaints, investigations and inspections.ADAMS: And third, we’ve launched a dedicated fraud reporting hotline and email address@childcare.gov whether you’re a parent, a provider, a member of the public, we want to hear from you. Let me be crystal clear. ACF expects every state to uphold the highest standards of oversight, monitoring and accountability for federal dollars. Minnesota is no exception.O’NEILL: We’re committed to holding bad actors accountable, regardless of rank or office, anyone who’s involved in perpetrating this fraud against the American people should expect to be prosecuted to the fullest extent of the law produced by the US Department.
Minnesota’s Child Care and Development Fund received $172 million from the federal government in 2024.
At the Quality Learing Center, a protester confronted Shirley, who fired back with facts.
The protester tried to shut down questioning, but Shirley revealed that the place teaches 99 children and has received $4 million in funding over the last two years.
Another daycare had a license for 102 children. It took in $2.66 million this year and $2.5 million last year.
But like The Quality Learing Center, the place is empty.
DHS put boots on the ground in Minnesota on Monday to investigate over 30 sites suspected of fraud.
A person told CBS News that the investigations include a “little bit of everything,” including immigration enforcement.
FBI Director Kash Patel already said the arrests connected to the “Feeding Our Future” fraud and Medicaid fraud are the “tip of the iceberg.”
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