Trump admin halts Minnesota childcare payments amid fraud claims: 'We have turned off money spigot'

The deputy HHS secretary said, 'Minnesota has funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade'
UPDATED DEC 31, 2025
In a video shared on Tuesday, December 30, Jim O’Neill and Alex Adams detailed three measures aimed at widespread fraud in Minnesota and across the country (@HHS_Jim/X)
In a video shared on Tuesday, December 30, Jim O’Neill and Alex Adams detailed three measures aimed at widespread fraud in Minnesota and across the country (@HHS_Jim/X)


WASHINGTON, DC: The Trump administration has halted all childcare payments in Minnesota and is calling for a complete audit of the state’s daycare centers amid an alleged billion-dollar fraud involving the human services department.

The Department of Health and Human Services (HHS) clarified the funding freeze in a statement: “We have turned off the money spigot and we are finding the fraud.” The video was shared on Tuesday, December 30.

The scandal first came to light when YouTuber and independent journalist Nick Shirley raised questions about possible fraud in Minnesota’s daycare subsidy system. Since then, he has pushed his claims further, pointing to what he says is widespread abuse of the program.

Minnesota will need to prove funds are being spent legitimately 

Deputy HHS Secretary Jim O’Neill addressed the situation on X (formerly Twitter), saying the move responds to what he called "blatant fraud that appears to be rampant in Minnesota and across the country."

“We have frozen all child care payments to the state of Minnesota,” O’Neill wrote Tuesday afternoon, following a viral video that exposed alleged fraud at daycare centers in the state. “Funds will be released only when states prove they are being spent legitimately,” he added.



O’Neill claimed that Minnesota has “funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade,” and outlined three measures the department is taking to prevent further misuse of funds.

The first step requires “a receipt or photo evidence” for any payments sent to states through the US Administration for Children & Families (ACF). O’Neill also said he has “demanded” that Governor Tim Walz conduct a “comprehensive audit” for the investigation. “This includes attendance records, licenses, complaints, investigations, and inspections,” he explained.

Minnesota Gov. Tim Walz speaks to media gathered on the first day of school at Deerwood Elementary on September 2, 2025 in Eagan, Minnesota. Walz has been considering a special session of the Minnesota legislature to address gun violence and regulations. The majority of Minnesota school children return to school today after last weeks mass shooting at Annunciation Church and School which killed two and injured 21 others.(Stephen Maturen/Getty Images)
Minnesota Gov Tim Walz speaks to media gathered on the first day of school at Deerwood Elementary on September 2, 2025, in Eagan, Minnesota (Stephen Maturen/Getty Images)

He specifically referenced Shirley’s video, in which he visited Minneapolis daycare centers receiving millions in state funds despite appearing closed or inactive. Finally, HHS has set up a dedicated hotline and email at childcare.gov for reporting suspected fraud.

Nick Shirley’s video exposes alleged childcare fraud, prompts federal probe

YouTuber Nick Shirley’s investigation prompted the Trump administration to take action against Minnesota. Shirley went viral after posting a 42-minute video chronicling his search for fraudulent childcare programs across the state.

His video, shared on the social platform X, has racked up over 100 million views, showing him visiting daycare centers that were receiving public funding. The 23-year-old alleged that several local centers were not caring for any children and confronted staff on camera, asking about the whereabouts of the children outside each facility.

The video gained widespread attention after a federal probe revealed that Minnesota’s nonprofit 'Feeding Our Future' had allegedly misused millions of dollars intended for low-income children during the pandemic.

GET BREAKING U.S. NEWS & POLITICAL UPDATES
STRAIGHT TO YOUR INBOX.

MORE STORIES

Sheriff Chris Nanos called the search for Nancy Guthrie exhausting and said authorities continue investigating leads, including an unidentified DNA sample
35 minutes ago
The president called his past Oval Office meeting with Bill Maher a 'waste of time', accusing the host of suffering from 'Trump Derangement Syndrome'
7 hours ago
FBI doubles reward to $100K as DNA, SUV emerge in Nancy Guthrie probe
8 hours ago
The White House mocked Trump’s Greenland takeover push with a card reading, 'It’s time we define our situationship,' over the island
16 hours ago
The announcement came as ICE is adding 12,000 new officers through a surge-hiring campaign, anticipating increased arrests in 2026
17 hours ago
Ilia Malinin said, 'Honestly, yeah, I was not expecting that. I felt going into this competition I was so ready'
18 hours ago
During the viral clip, Trump performed his familiar moves while clapping along with the crowd as Melania smiled and joined in politely
18 hours ago
Melania joins President Trump at Fort Bragg to recognize elite troops behind the Maduro operation, blending style with her official duties
20 hours ago
The email warned authorities to 'be prepared to go international,' which TMZ founder Harvey Levin interpreted as a potential link to Mexico
20 hours ago
Parents warn schools are crossing a line by using authority and class time to involve children in political protests without consent
21 hours ago