Trump administration says it's freezing child care funds to Minnesota after series of fraud schemes

President Donald Trump's administration announced on Tuesday that it’s freezing child care funds to Minnesota after a series of fraud schemes in recent years.

Deputy Secretary of Health and Human Services Jim O’Neill said on the social platform X that the step is in response to “blatant fraud that appears to be rampant in Minnesota and across the country.”

“We have turned off the money spigot and we are finding the fraud,” he said.

The announcement comes one day after U.S. Homeland Security officials were in Minneapolis conducting a fraud investigation by going to unidentified businesses and questioning workers.

There have been years of fraud investigation that began with the $300 million scheme at the nonprofit Feeding Our Future, for which 57 defendants in Minnesota have been convicted. Prosecutors said the organization was at the center of the country’s largest COVID-19-related fraud scam, when defendants exploited a state-run, federally funded program intended to provide food for children.

A federal prosecutor alleged earlier in December that half or more of the roughly $18 billion in federal funds that supported 14 programs in Minnesota since 2018 may have been stolen. Most of the defendants are Somali Americans, they said.

O’Neill, who is serving as acting director of the Centers for Disease Control and Prevention, also said in the social media post Tuesday that payments across the U.S. through the Administration for Children and Families, an agency within the U.S. Health and Human Services Department, will now require “justification and a receipt or photo evidence” before money is sent. They have also launched a fraud-reporting hotline and email address, he said.

He also called out a right-wing influencer who had posted a video Friday claiming he found that day care centers operated by Somali residents in Minneapolis had committed up to $100 million in fraud. O’Neill said he has demanded Minnesota Gov. Tim Walz submit an audit of these centers that includes attendance records, licenses, complaints, investigations and inspections.

Walz's office did not immediately respond to an email from The Associated Press seeking comment.

Walz, the 2024 Democratic vice presidential nominee, has said fraud will not be tolerated and his administration “will continue to work with federal partners to ensure fraud is stopped and fraudsters are caught.”

Walz has said an audit due by late January should give a better picture of the extent of the fraud. He said his administration is taking aggressive action to prevent additional fraud. He has long defended how his administration responded.

Minnesota’s most prominent Somali American, Democratic U.S. Rep. Ilhan Omar, has urged people not to blame an entire community for the actions of a relative few.