Minnesotas billion dollar fraud scandal
FBI is investigating the purported fraud in Minnesota day care facilities due to a viral video by Nick Shirley that challenged the legitimacy of certain centres that received federal and state funding worth $110M. Nick Shirley YouTube

A viral social media video has pushed a long-running federal investigation into Minnesota's childcare funding system back into the national spotlight, prompting the Federal Bureau of Investigation (FBI) to confirm it has expanded resources to examine allegations of fraud involving state- and federally funded daycare providers.

The controversy erupted after a weekend video by right-wing influencer Nick Shirley went viral, claiming that several childcare centres appeared inactive despite receiving large sums of public money.

The claims, which spread rapidly online, have reignited debate over fraud oversight, immigration politics, and the risks of stigmatising entire communities based on unverified accusations.

Viral Video Stirs Federal Probe

Nick Shirley's video gained attention after he alleged fraud at Minnesota daycare centres. The video, which has reached millions of views, shows Shirley visiting a series of facilities, including the Quality Learning Centre in Minneapolis, which appears to be inactive but, according to the video, has received close to $2M in government funding this year.

According to Shirley, his investigation revealed more than $110M in fraud involving daycare centres, most of which are owned by Somali immigrants, and states that most of the centres are not operating but still receive government funding.

'We uncovered over $110,000,000 in ONE day. Like it and share it around like wildfire! It's time to hold these corrupt politicians and fraudsters accountable,' Shirley wrote in X.

Supported by prominent conservative figures such as Vice-President JD Vance and Elon Musk, the video gained greater reach and political influence.

Shirley, a self-proclaimed independent journalist with an enormous YouTube following, has already produced politically controversial content, including an interview about the January 6 Capitol riot and other far-right issues.

FBI Resorts To Adding More Resources

The FBI responded to the video and the ongoing accusations, saying it had massively increased its investigative resources in Minnesota. Publicly, FBI Director Kash Patel admitted that the bureau had been short of personnel and resources to handle suspected fraud cases, indicating that the case under investigation involves almost a dozen social service providers.

'Fraud that steals from taxpayers and robs vulnerable children will remain a top FBI priority in Minnesota and nationwide,' Patel wrote on X.

Although Patel highlighted that the findings presented are only the tip of a much larger problem, law enforcement officials have stressed that the investigation is in-depth and ongoing.

'Those responsible pleaded guilty and were sentenced, including a 10-year prison term and nearly $48 million in restitution in related cases,' he further stated.

Police officers have been investigating fraud allegations at several facilities that have received federal grants, especially those centres run by the Somali community in Minnesota.

This interest of the FBI is also in line with the more extensive federal inquiry into a multi-million dollar scheme in which federally funded child nutrition programmes were exploited, which began in 2022.

Federal prosecutors thus far have charged 77 people in relation to a $250M scheme, and a conviction was made against a woman who was found to be the mastermind of the operation early this year.

State and Local Response

Minnesota officials have already reacted to Shirley's video. The Department of Children, Youth, and Families (DCYF) of the state confirmed that the 'Quality Learning Centre' had been shut down last week following an investigation into its licensing and compliance.

The department also stated that it visited other centres that Shirley had been to in recent months, and it was not verified that the centres were currently involved in fraud.

The Office of Governor Tim Walz defended the state's efforts to fight fraud, noting that it has increased oversight and is investigating suspicious centres. The governor's representatives said that the state has already reported these providers to law enforcement, which has raided the facilities in question.

The Walz administration insists that the state is diligently working to ensure that the money raised through population taxation is not squandered and that criminals are punished.

Community and Law Enforcement View

Even though the government has acted on the claims, the viral video and Shirley's related assertions have sparked an uproar. According to critics, the video is based on superficial visits and anecdotal evidence of the daycare's work and the community's efforts.

A number of the centres mentioned in the video are licensed to serve close to 100 children, and some have received previous fines for licensing violations, although authorities point out that, so far, no concrete proof of large-scale fraud has been provided.

The Minnesota Somali Community has been concerned about the possibility of racial profiling and stigmatisation. Those who object to Shirley's report argue that the focus on the Somali-run centres is damaging stereotypes and not addressing systemic fraud that cuts across communities.

It is time for a balanced approach that will curb misconduct without targeting an ethnic group as a whole, as called for by local officials and community leaders.

The incident has turned partisan, with US President Donald Trump and his supporters taking the opportunity to use the accusations to attack Somali immigrants and the immigration policies in general.