Federal Agents Execute Fraud Investigation Searches at Minnesota Childcare Centers

MINNEAPOLIS -- Federal agents executed multiple searches in Minnesota on Tuesday, seizing records and other evidence in an ongoing fraud investigation by the Trump administration of publicly funded social programs for children, authorities said. No details about possible crimes were disclosed, though armed agents were seen at childcare centers in the Minneapolis area. KSTP-TV said one crew even had a battering ram. The searches occurred months after right-wing influencer Nick Shirley posted a video that said members of Minnesota's Somali community were running fake childcare centers to collect federal subsidies. It caught the attention of the administration and conservative activists, though inspectors said the centers were operating as expected. Minnesota has been dogged by fraud: At least 65 people, many of them Somali Americans, have been convicted of ripping off a federal program that was meant to provide food to children. The investigation began during the Biden administration. Separately, a federal prosecutor in December said as much as $9 billion in federal funds that supported 14 Minnesota-run programs since 2018 may have been stolen. Democratic Gov. Tim Walz, who has been on the defensive about not doing enough to root out fraud, welcomed the raids Tuesday. Minnesota's child welfare agency said it shared key information with law enforcement to "hold bad actors accountable." "We catch criminals when state and federal agencies share information. Joint investigations work, and securing justice depends on it," Walz said. The searches were being conducted at day cares, businesses and some residences, according to a person familiar with the matter who spoke to The Associated Press on the condition of anonymity because they were not authorized to publicly discuss the investigation. Various state and federal agencies, including the Department of Homeland Security, participated in searches. At least two of the sites were in Shirley's video. Officers from Minnesota's Bureau of Criminal Apprehension were removing boxes at some locations. "The American people deserve to know how their taxpayer money was abused. ... No stone will be left unturned," said DHS, which also noted the cooperation of local and state authorities. On social media, FBI Director Kash Patel mocked Walz for taking credit "while we smoke out the fraud plaguing Minnesota under your governorship." Jason Steck, an attorney who represents childcare centers, said some of the targeted businesses were operated by Somali immigrants. They were not his clients. "A few childcare centers, a few autism centers, a few healthcare agencies of some type," Steck said, adding that it appeared to be a "particular sweep for fraud." The executive director of Child Care Aware of Minnesota, a nonprofit that serves childhood educators, said the publicity is unflattering. "The majority are in business to do good business. You're going to come across individuals who try to capitalize on systems that are broken and need to be fixed," Candace Yates said. Walz ended his bid for a third term as governor in early January amid President Donald Trump's relentless focus on fraud allegations and the state's Somali community. Trump has used dehumanizing rhetoric, calling Somali immigrants "garbage" and "low IQ." Tensions between Walz and the federal government subsequently rocketed during an extraordinary immigration crackdown that led to the deaths of two people before Operation Metro Surge was eased in February. In February, Vice President JD Vance said the government would temporarily halt $243 million in Medicaid funding to Minnesota over fraud concerns. Minnesota sued in response, warning it may have to cut healthcare for low-income families, but a judge on April 6 declined to grant a restraining order. Walz told Congress in March that he wanted to work with the federal government in fraud investigations, but that the immigration surge had made it more difficult. "The people of Minnesota have been singled out and targeted for political retribution at an unparalleled scale," he said at the time. Walz touched on the searches Tuesday night when he delivered his final State of the State speech, noting that he promised to devote his energies to fighting fraud back in January when he dropped out of the governor's race. "I've said the buck stops with me," he told a joint meeting of the state House and Senate. "Some of you will take that as an open invitation to play politics with every incident of fraud that takes place here in Minnesota, even though I have to tell you, statistics show it's happening in red states more than here. But so be it." The governor said that if lawmakers take fraud seriously, they should help him out by passing the anti-fraud package he unveiled in February. But Republican legislative leaders said afterward that Walz failed during his speech to take adequate responsibility for fraud on his watch. "While the governor made hints at taking accountability, he immediately turned to pointing fingers -- to pointing fingers at other states," House GOP Floor Leader Harry Niska told reporters.