Federal authorities have dispatched investigators to Minneapolis following allegations that Somali-run daycare centers improperly received government funding while failing to provide adequate care for children. The move comes in response to a viral video featuring independent journalist Nick Shirley, who claims to have evidence of fraudulent activities within these facilities.
The FBI, led by Director Kash Patel, stated that agents were already in Minnesota to address large-scale fraud schemes prior to the video’s release. Patel revealed that the FBI recently dismantled a significant fraud operation that misappropriated $250 million in federal food aid intended for vulnerable children during the pandemic. This investigation resulted in 78 indictments and 57 convictions. “The FBI believes this is just the tip of a very large iceberg,” Patel noted on social media, emphasizing the agency’s commitment to uncovering the extent of the fraud.
In addition to the FBI, agents from the Department of Homeland Security are visiting suspected fraud sites in Minnesota. Federal prosecutor Joe Thompson announced the identification of 14 high-risk Medicaid programs in the state, which have cost taxpayers an estimated $18 billion since 2018. Thompson indicated that there are grounds to suspect that over half of this amount may have been obtained fraudulently. He described the situation as “staggering industrial-scale fraud,” stating, “It’s swamping Minnesota and calling into question everything we know about our state.”
One recent case involves Abdinajib Hassan Yussuf, 27, who allegedly received $6 million in Medicaid funds through fraudulent claims for a program aimed at providing one-on-one therapy to children with autism. Reports indicate that Yussuf paid kickbacks to parents within the Somali community to falsely diagnose their children with autism spectrum disorder and enroll them in his program.
Other defendants involved in a Housing Stabilization Services fraud scheme reportedly traveled from Philadelphia to Minnesota to claim $3.5 million in fraudulent Medicaid payments, drawn by the perception that it was “easy money,” as outlined by Thompson.
In light of Shirley’s allegations, the Minnesota Department of Children, Youth, and Families has begun inspections of the daycare centers mentioned in the video. Commissioner Tikki Brown confirmed that several facilities are already under investigation. However, she noted that previous inspections did not reveal any findings of fraud, stating that children were present at each daycare visited within the last six months.
Chris Edwards, a federal budget expert at the Cato Institute, expressed caution regarding Shirley’s claims but acknowledged the significant fraud issue facing Minnesota. “It’s huge,” he remarked, highlighting that the scale of the alleged fraud is particularly concerning for a relatively small state.
Edwards pointed to vulnerabilities in federal aid programs administered by states, noting that a lack of strong incentives for state administrators to manage taxpayer money prudently contributes to fraud risks. He suggested that the automated claims process, coupled with the extensive nature of federal programs, creates opportunities for misuse.
A potential solution, according to Edwards, would be to allow states to independently fund welfare programs. He argued that since states are required to balance their budgets, they would be more vigilant in monitoring their spending. “The state policymaker, whether Republican or Democrat, knows that if spending is going up rapidly on some program, they’ve got to trim other programs,” he explained.
As investigations continue, the FBI aims to utilize insights gained from the Minnesota fraud case to identify similar patterns across other states. The ongoing scrutiny highlights both the complexity of federal aid programs and the challenges involved in safeguarding taxpayer resources.
