US freezes Minnesota childcare funds, audits Somali immigration cases as fraud drive escalates

The administration of United States President Donald Trump has frozen federal childcare payments to Minnesota and launched new audits of immigration cases involving Somali Americans, moves critics say deepen a campaign that blurs fraud enforcement with political targeting of immigrant communities.

The Department of Health and Human Services announced the funding freeze on Tuesday after allegations circulated by conservative YouTuber Nick Shirley, who claimed Somali American-run daycare centres in Minneapolis had committed up to $100m in fraud. His video drew massive traction, racking up 127 million views on X and extensive coverage on Fox News.

Jim O’Neill, deputy secretary of health and human services, said the decision was driven by what he called long-running abuses.

“We have turned off the money spigot and we are finding the fraud,” he said, citing “serious allegations that the state of Minnesota has funnelled millions of taxpayer dollars to fraudulent daycare centres across Minnesota over the past decade”.

The freeze affects $185m in federal funds that subsidise childcare for low-income families statewide. Minnesota has the largest Somali population in the US, and state officials warned the move would hit vulnerable families far beyond any alleged wrongdoing.

Governor Tim Walz swiftly condemned the decision as politically engineered. “This is Trump’s long game. We’ve spent years cracking down on fraudsters. It’s a serious issue – but this has been his plan all along,” Walz wrote on X. “He’s politicising the issue to defund programmes that help Minnesotans.”

At the same time, the Department of Homeland Security said it had begun reviewing immigration cases involving Somali Americans for possible fraud, a process that could lead to denaturalisation or the revocation of citizenship.

“Under US law, if an individual procures citizenship on a fraudulent basis, that is grounds for denaturalization,” DHS spokesperson Tricia McLaughlin said in a statement first reported by Fox News and later amplified by the White House.

She added that hundreds of investigators were examining Minneapolis-area businesses, saying authorities believed there was “rampant fraud, whether it be daycare centres, healthcare centres, or other organisations”.

Federal prosecutors allege that as much as $9bn may have been stolen from Minnesota social assistance programmes since 2018, including $300m taken from a children’s nutrition scheme during the COVID-19 pandemic. According to the administration, charges have been filed against 98 people, 85 of whom are described as being of Somali descent.

Although the nutrition fraud case surfaced publicly in 2022, it has gained renewed prominence this year as Trump and his allies sharpened their rhetoric. In late November, Trump accused “Somali gangs” of “terrorising” Minnesotans and revoked Temporary Protected Status for Somalis, a designation that had shielded them from deportation. Days later, he escalated his language further, calling Somalia “stinks” and referring to Democratic Congresswoman Ilhan Omar as “trash”.

FBI Director Kash Patel said the bureau had also stepped up its involvement, posting on X that agents had “surged personnel and investigative resources to Minnesota to dismantle large-scale fraud schemes exploiting federal programmes”.