A massive, decade-old fraud scheme involving federal childcare subsidies in Minnesota has become the largest prosecution in state history. The scheme, which systematically defrauded American taxpayers of over $250 million, centered on Somali-run daycare centers using “ghost children” to claim funds. Exposed by both 2015 surveillance video and a recent viral social media investigation, the scandal has led to nearly 100 federal charges and placed intense scrutiny on state oversight.
Story Highlights
- 2015 surveillance footage shows parents briefly checking in “ghost children” before leaving Somali daycares to claim federal subsidies.
- Federal prosecutors have charged 98 defendants, with 89% being Somali-American, in a $250+ million fraud scheme.
- YouTuber Nick Shirley’s viral investigation prompted massive federal response with FBI and Homeland Security raids.
- U.S. Attorney reveals $9 billion in federal aid across 14 Minnesota programs at risk since 2018.
Decade of Documented Fraud Exposed
Surveillance footage captured in March 2015 at a Hennepin County daycare center revealed parents systematically dropping off children for brief moments before taking them home, while fraudulently claiming full-day federal childcare subsidies. The damning video evidence, first aired by local Fox News in 2018, shows the “ghost children” scheme that has cost taxpayers hundreds of millions. This pattern of fraud has persisted for nearly a decade, with federal investigators now confirming similar operations across Minnesota’s Somali-run childcare network.
Minnesota knew about the Daycare Fraud since at LEAST 2013!
The fraud comes from Minnesota’s Child Care Assistance Program (CCAP); a voucher program to assist low-income families with daycare costs.
This video is from 2015 & was used as evidence, MN can’t say they didn’t know!! pic.twitter.com/RTvF7TV5jo
— Southern FFA Family (@FFAFamily) December 30, 2025
Federal Crackdown Reveals Massive Scale
FBI Director Kash Patel and Justice Department officials have charged 98 defendants in connection with the fraud scheme, with 85 individuals of Somali descent among those indicted. Over 60 defendants have already pleaded guilty to the charges. U.S. Attorney Joe Thompson disclosed that $9 billion in federal aid distributed across 14 state programs since 2018 faces scrutiny for potential misappropriation. The scale of this fraud represents one of the largest federal subsidy scams in American history, targeting programs designed to help working families afford childcare.
Social Media Investigation Triggers Federal Response
YouTuber Nick Shirley’s 42-minute investigation video, released in December 2025, garnered over 1 million YouTube views and 100 million views on X, documenting empty Somali-run daycares that continued receiving federal payments. His door-to-door investigation revealed facilities with no children present during operating hours, despite receiving substantial government subsidies. The viral exposure prompted immediate federal action, with Homeland Security conducting raids and the FBI increasing resources in Minnesota. This represents a new paradigm where citizen journalism can catalyze major federal enforcement actions.
Democratic Leadership Under Fire
Governor Tim Walz faces intense criticism for his administration’s oversight failures, despite his claims of implementing anti-fraud measures and requesting additional legislative authority. The fraud scheme flourished under Democratic state leadership, raising questions about deliberate negligence or incompetence in protecting taxpayer funds. Justice Department officials, led by Pam Bondi, announced that “more prosecutions are coming,” signaling the investigation’s expansion. This scandal undermines confidence in government oversight of federal programs and highlights how progressive policies often enable systemic abuse of public resources.
The Minnesota fraud case demonstrates how inadequate oversight and political correctness can facilitate massive theft of taxpayer money. With federal agencies now prioritizing this investigation under the Trump administration, Americans can expect accountability that was absent during previous years of Democratic control.
Watch the report: A look inside a Minneapolis child care center accused of fraud in now-viral video
Sources:
- How a viral video prompted investigations into alleged fraud at day care centers in Minnesota – CBS News
- 2015 footage shows parents allegedly participated in Minnesota fraud scheme
- Trump administration says it’s withholding childcare funds from Minnesota amid fraud allegations
