DHS Raids Minnesota Fraud Daycares

Federal authorities say a sweeping fraud investigation is now underway in Minneapolis, marking a significant escalation in a case that has been unfolding for years and has already produced dozens of convictions tied to the largest COVID-19 aid fraud scheme in U.S. history.

The announcement came Monday from Department of Homeland Security Secretary Kristi Noem, who said DHS officers were actively conducting investigations into what she described as “rampant fraud,” including in child-care and related social-service programs. Noem posted video footage showing federal officers questioning staff at an unidentified Minneapolis business, signaling a visible federal presence on the ground.

The investigation follows years of federal and state probes that began with the collapse of Feeding Our Future, a nonprofit at the center of a roughly $300 million scheme involving federally funded child-nutrition programs. Prosecutors have said defendants exploited emergency pandemic waivers to claim reimbursement for meals that were never served. To date, 57 defendants in Minnesota have been convicted in cases tied to that operation.

Earlier this month, a federal prosecutor made an even more explosive claim, alleging that half or more of the approximately $18 billion in federal funds that supported 14 Minnesota programs since 2018 may have been stolen through fraud. According to the U.S. Attorney’s Office for Minnesota, the vast majority of those charged so far are Somali Americans.

The DHS action also comes a day after Kash Patel, the director of the FBI, announced that the bureau had “surged personnel and investigative resources to Minnesota” to dismantle what he called “large-scale fraud schemes exploiting federal programs.” Patel warned that earlier arrests were “just the tip of a very large iceberg.”

Minnesota Gov. Tim Walz has come under increasing scrutiny as the scope of the alleged fraud has widened. President Donald Trump has publicly criticized Walz’s administration, while state and federal officials have traded statements over responsibility and oversight failures.

Walz has said fraud will not be tolerated and that his administration is cooperating with federal authorities. His spokesperson, Claire Lancaster, reiterated Monday that the governor has worked for years to crack down on fraud, sought expanded authority from the state legislature, supported criminal prosecutions, strengthened oversight, and hired outside auditors to review payments to high-risk programs.

The investigation is unfolding amid heightened tensions in the Minneapolis–St. Paul area, where the Trump administration’s immigration enforcement push has focused particular attention on the region’s large Somali community, the largest in the United States. Federal officials say that among the schemes uncovered so far, defendants allegedly targeted programs involving child nutrition, housing services, and autism care.

Adding fuel to the controversy, recent viral videos by independent YouTuber Nick Shirley showed several child-care centers that had received millions of dollars in government funding appearing to be closed, empty, or barely operational. State officials later confirmed that payments to those facilities had not been paused prior to the videos gaining national attention, and that site inspections were launched only afterward. One prominently featured center, whose signage misspelled the word “learning,” shut down shortly after the footage spread online.

For federal investigators, the Minneapolis operation now represents a broader test case. DHS, the FBI, and U.S. Immigration and Customs Enforcement have all signaled that arrests, not just audits, are expected where abuse is found. As the probe expands, officials say more charges are likely, and the full scale of losses to taxpayers may still be far from clear.