A Minnesota child care center at the center of widespread fraud allegations stemming from a viral video was operating normally when investigators visited, the Minnesota Department of Children, Youth and Families said in a news release Friday.
“Children were present at all but one location – which was not yet open to families on the day inspectors arrived,” the agency said.
The agency collected evidence and initiated further review, the report said, noting that investigations into the four centers are ongoing.
A few days ago, YouTube content creator Nick Shirley, who has made anti-immigrant and anti-Muslim videos, posted a viral video claiming to have uncovered widespread fraud at child care centers operating in Somalia.
The video, which contains limited evidence to support the creator’s accusations, had 3 million views on YouTube as of Friday and gained attention after being retweeted by Vice President J.D. Vance and former Government Effectiveness chief Elon Musk.
The conservative activist’s 42-minute video, posted the day after Christmas, went viral and prompted increased U.S. immigration enforcement, a freeze on federal funds and more vitriolic rhetoric against the Somali community from President Donald Trump.
The state Department of Children, Youth and Families warned Friday that spreading “uncensored or deceptive claims and misuse of tip lines can interfere with investigations, create safety risks for families, providers and employers, and fuel harmful narratives about Minnesota’s immigrant communities.”
“DCYF remains committed to fact-based reviews that deter fraud, protect children, support families, and minimize disruption to communities that rely on these essential services,” the report said.
After the video was released, the U.S. Department of Health and Human Services froze all child care payments to the state pending review while the FBI and Department of Homeland Security investigate the fraud allegations. CNN contacted the FBI and DHS on Friday seeking comment on the state’s preliminary findings.
A spokesman for the U.S. Department of Health and Human Services did not respond directly to the state’s findings Friday and reiterated calls for stronger verification procedures to prevent fraud. “The state has a responsibility to provide additional verification,” said Andrew Nixon, deputy assistant secretary for media relations at the U.S. Department of Health and Human Services.
The Trump administration has given Minnesota officials until next Friday to provide verification information about providers and parents receiving federal child care funds, according to an email DCYF shared with The Associated Press on Friday. CNN has reached out to the Department of Health and Human Services and state officials seeking clarification.
In addition to calling for a state audit of the Minnesota day care center featured in the video, Health and Human Services Secretary Jim O’Neill said the agency will now require the department’s Administration for Children and Families to provide states with justification and receipts or photographic evidence of all payments.
The allegations made in the controversial video involve funding for the 2025 Child Care Assistance Program (CCAP).
The report lists the amount of CCAP funding each center received in fiscal year 2025 in the video, ranging from $470,000 to $3.6 million, for a total of more than $17 million.
One center mentioned in the video has been closed since 2022, the report said.
CCAP does not accept applications directly for day care centers. Instead, qualified working parents and other qualified caregivers whose incomes fall below the program’s income limits can apply directly to the state for assistance, which will be paid to day care centers.
The accusations made in the video are the latest in a series of fraud scandals involving state social service programs that provide meals to poor children during the pandemic, Medicaid housing assistance and other safety nets that benefit poor families.
The scandals date back nearly a decade and include accusations of fraud against a Somali community focused on Feeding Our Future, a nonprofit prosecutor said the organization falsely claimed to be providing meals to poor children during the Covid-19 pandemic. Beginning in 2022, federal charges were brought against dozens of people, mostly Somalis.
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