Federal Agents Target Minnesota Somali Daycare Fraud Scam in $1 Billion Scheme

Federal agents intensified operations targeting widespread fraud by Somali-run daycare centers in Minnesota on Tuesday as part of a massive effort to crack down on schemes that have defrauded state and federal programs.

The Department of Homeland Security highlighted the second day of its investigation in Minneapolis, where agents conducted searches and enforcement actions against individuals suspected of misusing taxpayer funds.

This crackdown follows independent journalist Nick Shirley’s reports that Somali-operated daycare centers in the Minneapolis area committed as much as $100 million in fraud. Minnesota has faced years of scrutiny over large-scale fraud involving Medicaid, pandemic relief funds, and child nutrition programs. The state’s most notorious case is the “Feeding Our Future” scandal, which prosecutors called the largest COVID-19-related fraud scheme in the country.

In that case, approximately $300 million in pandemic relief funds intended for children’s food were misused since 2022. Since then, 78 people have been charged and 57 have pleaded guilty or been convicted.

Federal prosecutor Joe Thompson has estimated total losses from fraud schemes in Minnesota could exceed $1 billion. Earlier this month, a federal prosecutor alleged that half or more of the roughly $18 billion in federal funds sent to support 14 Minnesota programs since 2018 may have been misappropriated.

Minnesota Governor Tim Walz, the state’s Democratic leader and 2024 vice presidential nominee, pledged cooperation with federal authorities. House Oversight Committee Chairman James Comer announced plans to subpoena top Minnesota officials, including Walz, as Congress investigates how the fraud went undetected for years.