Federal Investigation Targets Fraud in Minnesota Childcare Funding

Tue Dec 30 2025 21:30:27 GMT+0200 (Eastern European Standard Time)

Federal officials, led by Homeland Security Secretary Kristi Noem, are intensifying investigations into significant fraud cases in Minnesota related to a childcare funding scheme, with ties to a $300 million fraud scandal involving Feeding Our Future.

The Department of Homeland Security is conducting a major investigation into alleged fraud linked to childcare funding in Minnesota. This follows a larger $300 million fraud scandal associated with Feeding Our Future, resulting in the conviction of 57 defendants. Federal officials assert that a considerable portion of federal funds, potentially exceeding $9 billion, may have been misappropriated. Governor Tim Walz and federal authorities emphasize a zero-tolerance stance towards fraud.

MINNEAPOLIS (RTW News) — A significant federal investigation is underway in Minnesota focusing on fraud linked to childcare funding, as reported by Department of Homeland Security Secretary Kristi Noem.

This Federal action follows a prolonged probe into a $300 million scheme involving the nonprofit organization Feeding Our Future, wherein 57 defendants have already faced convictions. Prosecutors have identified this organization as central to the largest COVID-19-related fraud case in the United States, where defendants manipulated a federally funded initiative intended to provide food for children.

Recent allegations by a federal prosecutor indicated that potentially half of the $18 billion in federal aid allocated to 14 programs in Minnesota since 2018 could have been misappropriated, with many of the accused being members of the Somali American community.

Governor Tim Walz stated earlier that his administration stands firmly against fraud and intends to collaborate with federal agencies to ensure accountability for fraudsters.

On social media, Noem showed DHS officers visiting an unspecified business, stating that they were executing a broad investigation into rampant fraud within childcare operations.

U.S. Immigration and Customs Enforcement also weighed in, asserting that the American public is entitled to transparency regarding the use of taxpayer dollars, and promising arrests where misuse is uncovered.

The heightened investigation follows recent comments from FBI Director Kash Patel, who announced a surge in personnel and resources aimed at dismantling large-scale fraud exploiting federal programs. He acknowledged that previously made fraud arrests are merely 'the tip of a very large iceberg.'

President Donald Trump has been vocal in criticizing the administration of Governor Walz regarding the fraud situations, emphasizing the necessity of robust action in tackling these issues. The scrutiny has also revealed there is a growing tension between state and federal enforcement in the area, particularly concerning immigration policy and its impacts on the local Somali community.

With 82 out of 92 defendants in these cases identified as Somali Americans, the U.S. Attorney's Office for Minnesota continues to work with state officials to combat fraud effectively.

Governor Walz's administration, as stated by spokesperson Claire Lancaster, has undertaken numerous actions over the years to combat these fraudulent activities—calling for more legislative power to act decisively against such crimes while maintaining oversight through audits and prosecutions.