A viral video posted on December 26, 2025, by 23-year-old conservative content creator Nick Shirley sparked a major controversy over alleged fraud in Minnesota's child care system. The 43-minute video, titled "I Investigated Minnesota’s Billion Dollar Fraud Scandal," claimed that Somali-run child care centers were fraudulently receiving millions in federal funding while providing little to no actual child care services. Shirley alleged $110 million in fraud across 10 day care centers, asserting that many facilities appeared empty or inactive despite receiving public funds.
The video quickly gained traction, amassing millions of views on YouTube and X (formerly Twitter), and was amplified by high-profile figures including Vice President JD Vance, FBI Director Kash Patel, and tech billionaire Elon Musk. Shirley, who has no formal journalism background but is known for politically charged viral content, framed the issue as part of a broader pattern of fraud involving Somali-American-run businesses, even suggesting some funds may have reached terrorist groups like al-Shabaab—a claim not substantiated by authorities.
In response, Minnesota state officials conducted on-site compliance checks at all centers featured in the video. The Department of Children, Youth, and Families reported that children were present at all but one location during inspections, and no findings of fraud were discovered. Despite these initial findings, federal investigations by the Department of Health and Human Services (HHS), the FBI, and Homeland Security Investigations (HSI) have continued, with HHS freezing Minnesota’s $185 million in annual federal child care funding for approximately 19,000 children. The freeze remains in effect pending a comprehensive audit, with a Friday deadline set for the state to provide detailed documentation on fund recipients.
Governor Tim Walz, facing intense political pressure and calls for resignation, announced on January 5, 2026, that he would drop his reelection campaign, citing the need to focus on defending Minnesota families rather than his political future. Walz defended his administration’s record, emphasizing ongoing anti-fraud efforts such as increased audits, leadership changes, and the appointment of a former FBI agent to lead program integrity reforms.
The fallout has extended beyond policy, with Somali-American communities and child care providers reporting harassment, threats, and vandalism. The Council on American-Islamic Relations has raised concerns about anti-Somali and anti-Muslim bias, while officials in other states, including Ohio and Washington, have reported similar incidents of unverified online investigations targeting day care providers.
Meanwhile, the scrutiny has inspired copycat videos in other states, prompting warnings from officials that filming or confronting providers without evidence constitutes harassment, not investigation. As of January 9, 2026, no arrests have been publicly reported in connection with the federal probes, and the future of child care funding in Minnesota remains uncertain.