Federal Agents Search 20 Minneapolis Child Care Centers in Ongoing Fraud Investigation

On April 28, 2026, federal agents executed search warrants at approximately 20 child care centers in Minneapolis as part of an ongoing investigation into suspected fraud related to COVID-era programs. No arrests were made during the raids.

Key Details of the Operation

• The operation was conducted by the FBI, alongside federal, state, and local law enforcement partners.
• A Justice Department spokesperson described the activity as a "court-authorized law enforcement activity as part of an ongoing fraud investigation."
• CBS News Minnesota observed agents at the Mini Child Care Center in south Minneapolis, where they were seen taking photographs and carrying a large portable file case.
• The investigation focuses on alleged fraud schemes in Minnesota's child care programs, including the Child Care Assistance Program (CCAP) and broader COVID-era relief funds.

"If you commit fraud in Minnesota you're going to get caught... We catch criminals when state and federal agencies share information." — Minnesota Governor Tim Walz

Background and Timeline of Events

Late December 2025

• YouTuber Nick Shirley posted a video alleging that nearly a dozen federally supported child care centers in Minneapolis were not providing services and were defrauding taxpayers. The video garnered tens of millions of views.
• The video was amplified by public figures including Elon Musk, Vice President J.D. Vance, and then-Attorney General Pam Bondi.
• Department of Homeland Security (DHS) agents conducted an investigation in Minneapolis. DHS Secretary Kristi Noem referred to it as a "massive investigation on childcare and other rampant fraud," with agents expected to inspect over 30 sites.

January 2026

• Minnesota's Office of Inspector General conducted compliance checks at nine centers mentioned in the video.
• State investigators reported that during eight of the nine inspections, children were present. One facility lacked children because it had not yet opened for the day when inspectors arrived.
• The Minnesota Department of Children, Youth and Families (DCYF) stated that the centers were "operating as expected."
• The federal Department of Health and Human Services (HHS) froze federal child care funding for Minnesota. The Administration for Children and Families annually provides Minnesota with approximately $185 million in child care funds.

February 2026

• Three centers sued the state, claiming unfair punishment.

Ongoing Legal Context

• Since 2021, 92 people have been charged in related fraud schemes, with 67 convicted, including five guilty pleas in the Feeding Our Future scandal.
• Assistant US Attorney Melinda Williams reported 98 individuals charged in "fraud against the government cases."

Funding Levels for Centers Under Scrutiny

The DCYF disclosed the following funding amounts received by nine child care centers from Minnesota's Child Care Assistance Program in fiscal year 2025:

The Child Care Assistance Program supports approximately 23,000 children and 12,000 working families monthly.

Quality Learning Center: A Case Study in Conflicting Reports

The Quality Learning Center on Nicollet Avenue has become a focal point of public discussion. The center's sign, which misspelled "Learning," was highlighted in Shirley's video.

Licensing and Operations

• State records indicate Quality Learning Center was cited for 121 violations between May 2022 and June 2025, with 10 identified in the most recent licensing review. Citations included an unqualified substitute and insufficient documentation for children's medicine. None of the recorded violations suggested the building was empty.
• In May 2022, inspectors identified 27 violations, including 10 repeat offenses, leading to the center's license being placed on conditional status for two years. The notice cited "serious and chronic nature of these violations... which impact the health and safety of children in your care."
• The facility is licensed for a maximum of 99 children. Manager Ibrahim Ali told KARE it serves 50 to 80 children daily.

Conflicting Reports on Operations

• On December 19, DCYF was informed that Quality Learning Center intended to voluntarily close. However, licensing investigators found it had chosen to remain open.
• Commissioner Tikki Brown announced that "Quality Learning Center closed just over a week ago," a statement reiterated by Governor Walz's office. However, later that same afternoon, children were observed arriving at the center.
• Ibrahim Ali stated to CNN affiliate KARE that Shirley's video was filmed before the business opened for the day. He stated that "no fraud is going on whatsoever."

"Our team of prosecutors, federal agents, and law enforcement partners continue to expose the rampant fraud in Minnesota." — U.S. Attorney Daniel N. Rosen

Oversight History and Systemic Challenges

Records indicate that Minnesota has faced challenges in improving oversight of the CCAP payment system for over a decade.

Federal Audit Findings

• In May 2025, the federal OIG released an audit of 200 randomly selected CCAP payments from 2023. 38 instances did not comply with attendance and payment requirements. The OIG extrapolated an error rate of at least 11% in payments made to 1,155 centers during 2023.
• The audit concluded that "Minnesota's limited oversight... increased the risk of fraud, waste and abuse."

State Legislative Audit

• A 2019 report detailed that DHS established an investigatory team in 2013 to address suspected fraud. Between 2013 and 2018, prosecutors established fraud totaling an estimated $5 million to $6 million, leading to charges against more than a dozen individuals.

Enforcement Data

• At a February 2025 committee meeting, officials reported that DHS employs a team of four investigators dedicated to CCAP fraud.
• Since 2020, this team has recovered approximately $2.4 million and referred an average of five cases annually for criminal investigations since 2021.
• During the same period, DHS has ceased payments to 79 CCAP providers.

Legal and Political Context

• President Trump made derogatory remarks about the Somali community and ended temporary deportation protections for Somali immigrants in Minnesota.
• Minnesota Governor Tim Walz announced he would not seek a third term and introduced a new statewide fraud prevention program.
• Republican Rep. James Comer of Kentucky opened a House Oversight Committee investigation into fraud in Minnesota's public assistance programs.
• The funding freeze and increased scrutiny led to the arrival of over 2,000 federal agents from CBP and ICE in the Twin Cities, resulting in the deaths of two Americans, Renee Good and Alex Pretti, and approximately 3,700 immigrant arrests — most not Somali or connected to alleged fraud.

Conflicting Reports on Video Allegations

• A CBS News Minnesota analysis of nearly a dozen day care centers mentioned by Shirley found that all but two possessed active licenses. State regulators had visited all active locations within the preceding six months. The review identified numerous citations related to safety, cleanliness, equipment, and staff training, but no recorded evidence of fraud.
• State Commissioner Tikki Brown stated that ongoing investigations into centers featured in Shirley's video "uncovered no findings of fraud."
• One child care center provided security footage, which its owners stated disproved Shirley's claims for the day he visited.
• DHS has requested two months of attendance records from the centers. The findings from these current investigations have not yet been publicly released.