The federal government has halted all child care payments to Minnesota amidst a developing daycare fraud scandal in the Democratic-led state.

Jim O’Neill, the Deputy Secretary of Health and Human Services, announced on Thursday that funding has been suspended, urging Governor Tim Walz to conduct an audit of the centers implicated in the scandal.

“We have shut down the funding and are actively uncovering the fraud,” O’Neill stated emphatically.

This decision by the Administration for Children and Families (ACF), a branch of HHS responsible for overseeing child care, follows the release of footage by independent journalist Nick Shirley showing a seemingly vacant daycare in Minnesota.

Reports suggest this facility has received millions in taxpayer dollars, prompting Shirley to assert that the state is permitting what could be ‘the largest fraud in US history’ to continue without intervention.

‘You have probably read the serious allegations that the state of Minnesota has funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade,’ O’Neill wrote. 

O’Neill said he has activated the ‘spend defend system for all ACF payments,’ meaning that all payments going forward across the country will require proof and reasoning before the money is allocated. 

He added that he and ACF Assistant Secretary Alex Adams have identified the people involved in the scheme that Shirley allegedly unveiled. 

Independent journalist Nick Shirley shared video from an apparently empty daycare in Minnesota

The HHS has demanded that Governor Tim Walz (pictured with his wife, Gwen) audit the centers allegedly involved in the fraud scandal

In another effort to combat money funneling under the guise of childcare, a ‘fraud-reporting’ hotline and email address have been set up.

‘Whether you are a parent, provider, or member of the general public, we want to hear from you,’ O’Neill wrote. 

The Minneapolis facility that Shirley highlighted notably featured a misspelled sign, which the business named Quality ‘Learing’ Center instead of Quality ‘Learning’ Center.

Despite reportedly receiving $4 million in federal funding through Minnesota’s Child Care Assistance Program (CCAP), Shirley noted that no children were in sight. 

Politicians have since expressed outrage with Walz’s seemingly lax handling of the alleged illegal activity.

‘Fraud is easy to find – if you’re willing to look for it,’ Gubernatorial candidate Lisa Demuth said.

‘Many of these seemingly vacant businesses have been cited by the Walz admin for licensing violations, which should have made it easy to catch and stop millions from being stolen.’ 

State Representative Tom Emmer has also criticized the Walz administration, writing on X: ‘Four million dollars of hard-earned tax dollars going to an education center that can’t even spell learning correctly. Care to explain this one, Tim Walz?’

Footage of the facility, featuring a misspelled sign as ‘Quality Learing Center’, sparked outrage among lawmakers

Following Shirley’s bombshell video, which garnered more than 65 million views in just two days, the business in question appeared to be ‘trucking in’ kids, the New York Post observed on Monday. 

While locals admitted they thought the center was closed because they had never seen children there, more than a dozen alleged daycare attendees were ushered into the facility.   

‘We’ve never seen kids go in there until today,’ one nearby resident told the NY Post. 

‘That parking lot is empty all the time, and I was under the impression that place is permanently closed.’

The skepticism prompted Ibrahim Ali, the son of the facility’s owner, to hit back, asking: ‘Do you go to a coffee shop at 11 pm and say, “Hey, they’re not working?”‘

He argued that when Shirley arrived and began filming the nearly deserted facility, it had not yet opened for the day.  

Ali also attempted to shift blame for the incorrect ‘learing’ sign, accusing a graphic designer of making a spelling mistake.

‘What I understand is [the owners] dealt with a graphic designer. He did it incorrectly. I guess they didn’t think it was a big issue,’ the 26-year-old said.

‘That’s gonna be fixed.’

The center claims its opening hours are 2 pm to 10 pm, Monday to Thursday.

Despite Shirley’s accusations, Minnesota Department of Children, Youth and Families Commissioner Tikki Brown said the facilities mentioned in Shirley’s video had been inspected in the past six months.

She said in all cases, children were present when authorities arrived to conduct their searches.

The frenzy surrounding Shirley’s video comes as several major fraud schemes, largely involving people of Somali descent, are being investigated across the state. 

This is a developing story…