Deputy Secretary of Health and Human Services (HHS) Jim O'Neill announced late Tuesday that the Trump administration has immediately frozen all federal child care payments to the state of Minnesota.
The move marks a noticeable escalation of the ongoing fraud probes plaguing the North Star State's social services programs. It is a clear response to a recent viral video, covered extensively here at RedState, reportedly showing empty "daycare" facilities with misspelled signs, locked doors, and no trace of children.
Numerous daycares in the 42-minute video from independent videographer Nick Shirley—which has been viewed over 128 million times—appear to not be operational, despite millions in taxpayer funds flowing to them.
Now, some of those daycares are seeing their funds get cut off. And they'll have to jump through a few hoops to get the gravy train back on track.
🚨 Here is the full 42 minutes of my crew and I exposing Minnesota fraud, this might be my most important work yet. We uncovered over $110,000,000 in ONE day. Like it and share it around like wildfire! Its time to hold these corrupt politicians and fraudsters accountable
— Nick shirley (@nickshirleyy) December 26, 2025
We ALL… pic.twitter.com/E3Penx2o7a
READ MORE: New Twists in Viral MN Daycare Story Amid Puzzling Response From Officials
Watch: DHS and ICE Investigators Going Door to Door to Crack Down on Suspected Minneapolis Scammers
"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 on X. "Today, we have taken three actions against the blatant fraud that appears to be rampant in Minnesota and across the country."
The first step involves activating "the spend system for all ACF (Administration for Children & Families) payments."
O'Neill explained, "Starting today, all ACF payments across America will require a justification and a receipt or photo evidence before we send money to a state."
He also posted a video to YouTube explaining that he has directed Assistant Secretary for the ACF Alex Adams to identify all daycares involved in the viral video, such as the infamous "Quality Learing Center" and demanded that Minnesota Governor Tim Walz (D) conduct a comprehensive audit of these facilities.
"We believe the state of Minnesota has allowed scammers and fake daycares to siphon millions of taxpayer dollars over the past decade," O'Neill says in his video statement.
We have frozen all child care payments to the state of Minnesota.
— Deputy Secretary Jim O'Neill (@HHS_Jim) December 30, 2025
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.
Today we have taken three actions… pic.twitter.com/VYbyf3WGop
And while Shirley did some of the initial heavy lifting in exposing these seemingly fraudulent daycares, the third prong of the HHS response allows others to report similar ghost daycares to the department. They have set up a "dedicated fraud-reporting hotline and email address" for parents, providers, or just concerned citizens to report potentially fraudulent activity in any state.
"Let me be crystal clear. ACF expects every state to uphold the highest standards of oversight, monitoring, and accountability for federal dollars," Adams explains. "Minnesota is no exception."
"We're committed to holding bad actors accountable," O'Neill adds. "Regardless of rank or office, anyone who's involved in perpetrating this fraud against the American people should expect to be prosecuted to the fullest extent of the law."
Demonstrating the scope of the Trump administration's investigation into Minnesota fraud, the Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) investigators have also recently begun going door-to-door in Minneapolis to question a number of these sketchy businesses.
The announcement from HHS, however, shows they're not stopping with Minnesota. Will this funding freeze mark a much larger national reckoning over billions in misspent child care funds, a scandal that FBI Director Kash Patel has said is merely the "tip of a very large iceberg"?
"We have turned off the money spigot, and we are finding the fraud," O'Neill concluded.
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