Federal Freeze Hits Minnesota Over Fraud Scandal

Clear Facts

• The Department of Health and Human Services halted all child care payments to Minnesota following reports of widespread fraud.
• Officials claim millions in taxpayer dollars may have gone to fraudulent daycares over ten years.
• A comprehensive audit and new fraud reporting channels have been launched to address the situation.

The Biden administration’s Department of Health and Human Services has frozen all child care payments to Minnesota after revelations of significant fraud involving daycare funds.

Deputy Secretary Jim O’Neill and Assistant Secretary Alex Adams announced the freeze in a video posted on X, citing

“serious allegations”

that taxpayer dollars have supported fraudulent daycares throughout the state.

“We have frozen all child care payments to the state of Minnesota,”

O’Neill and Adams said.

HHS outlined three steps: first, implementing the ‘Defend the Spend’ system.

It requires clear documentation before money is distributed to any state.

The second step involves a detailed audit of daycare centers, focusing on attendance records and licensure.

This was spurred by journalist Nick Shirley’s investigative reporting.

A third action includes the launch of a hotline and email address for fraud tips from parents, providers, and citizens.

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

officials stated.

Nick Shirley’s investigations revealed evidence of fraudulent activity in Minneapolis, with some centers showing no visible children and possible scam operations.

His reporting followed federal prosecutors confirming at least $9 billion in fraud under the administration of Minnesota Governor Tim Walz.

According to First Assistant U.S. Attorney Joe Thompson, 14 Medicaid services in Minnesota are deemed at

“high risk”

for fraud.

“It’s so obvious. If you’re living in Minnesota, you have to raise your eyebrows and think, ‘What’s going on?’ Literally, if you drive around Minneapolis, you’ll see daycare centers, autism centers — you will then see transportation companies that have snow piled up as if they haven’t moved it in months.”

“A kindergartner could’ve figured out there was fraud going on.”

Governor Walz responded by acknowledging that fraud happened under his watch but shifted blame to President Donald Trump.

He claimed that federal authorities have hampered state efforts by releasing prisoners early.

“We’ve spent years cracking down on fraud – referring cases to law enforcement, shutting down and auditing high-risk programs,”

Walz posted on social media.

“Trump keeps letting fraudsters out of prison. To the national news just now paying attention, here’s what we’ve done to stop it.”

Stay tuned as Minnesota faces increased federal scrutiny and local officials continue to respond.

Let us know what you think, please share your thoughts in the comments below.

Read more at The Daily Wire