A series of fraud scandals and allegations concerning federal funds to Minnesota state-administered social services programs occurred during the 2020s. The largest and earliest case is the Feeding Our Future case, in which more than 50 people have been convicted since charges were brought in 2022. Feeding Our Future was a nonprofit that claimed to provide meals to schoolchildren during the COVID-19 pandemic.
Amid ongoing investigation into the Feeding Our Future case, potential fraud was identified and investigated in a number of other state-run social services schemes, including emergency housing, autism therapy for children, home health assistance, and Medicaid. State lawmakers passed some bipartisan anti-fraud measures in the 2025 Minnesota legislative session.[1] By late 2025, Minnesota had shut down its housing stabilization system and paused payments in 14 Medicaid programs, including autism therapy, while launching an audit.[2]
In December 2025, a viral video by YouTuber Nick Shirley ignited new allegations of social services frauds at Somali-American daycare centers and health care companies, but news outlets said the video's allegations were unsubstantiated.[3][4] Following Shirley's video, the Trump administration froze all federal childcare payments to Minnesota and initiated further investigations.[5] In January 2026, The Centers for Medicare & Medicaid Services (CMS) announced that it would audit Minnesota's Medicaid programs and ordered a six-month pause on federal funding to reimburse the 14 high-risk programs.[6]
In January 2026, Walz withdrew his bid for a third term as governor amid the controversy over fraud in state programs.[7]
In 2022, during the Biden administration, federal prosecutors filed charges against the Minnesota nonprofit Feeding Our Future, which had received federal funding to distribute meals to children. Prosecutors said that during the COVID-19 pandemic, Feeding Our Future had committed fraud worth over $250 million, submitting fraudulent meal sheets to receive funding.[8] The Minnesota Department of Education (MDE), which was responsible for distributing funds, had found irregularities in the group's paperwork as early as 2020. In December 2020, MDE began denying applications and renewals for food sites associated with Feeding our Future. In March 2021, MDE initiated a payment freeze to 26 nonprofits connected to Feeding our Future.[9][10]
In March 2021, Feeding Our Future sued the agency to resume payments. The following month, Ramsey County District Judge John Guthmann ruled that MDE acted too quickly in halting payments and lifted the payment freeze.[9] MDE and Governor Walz characterized the court ruling as forcing them to resume payments to Feeding our Future, with MDE stating that "the court made it clear that if MDE were to continue the legal fight to withhold payments, MDE would incur sanctions and legal penalties". Judge Guthmann issued a rare public rebuke in response to Walz's statements, saying he never ordered MDE to resume payments to Feeding our Future, and that MDE had itself determined that Feeding our Future had resolved 'serious deficiencies' that justified its initial payment freeze.[11] After the court ruling, MDE continued to reject new applications for new meal sites from Feeding our Future and contacted the FBI.[10]
At a 2021 party organized by Feeding our Future to celebrate its legal victory over the Department of Education, Minneapolis city council member Jamal Osman announced that he would lobby MDE on behalf of Feeding our Future. Osman prepared a resolution to MDE calling on them to maximize minority participation in the federal meals program. The resolution was written by Feeding our Future leader Aimee Bock and sent to Osman by Abdi Salah, a top adviser to Minneapolis mayor Jacob Frey who was later convicted in connection with Feeding our Future. Osman's wife was found to have run a meal site claiming to feed 2,500 children a day. In 2020, Osman transferred a nonprofit he incorporated to people who were later charged with using it to steal millions in food aid.
In June 2021, state senator Omar Fateh praised Bock and Feeding our Future for securing funding against MDE's payment freeze. A witness in a Feeding our Future trial testified that Fateh called Attorney General Ellison on behalf of Feeding our Future as part of their efforts to interfere with MDE's investigation and smear it as racist. Fateh also publicly accused state agencies of racism at the 1st Annual Somali American Elected Officials Town Hall event.[12] Mayor Frey met with MDE regarding Feeding our Future in 2021 in order to push MDE Commissioner Heather Mueller into restarting funding. Bock had prepared talking points for the meeting, which were delivered to Frey through his advisor Salah, although Frey denied using them during the meeting.[13]
FBI raids began targeting Feeding our Future in January 2022, which finally stopped payments to the organization. Politicians who received donations from suspects implicated in Feeding our Future subsequently returned or donated their contributions, including Frey, Fateh, and Congresswoman Ilhan Omar. An initial arrest was made against Mohamed Jama Ismail as he tried to leave the country in April 2022. Federal indictments on charges related to financial fraud were issued in September 2022.[10][14][15] As of late 2025, out of 78 suspects indicted in the fraud, more than 50 had pleaded guilty.[16] Another seven were found guilty at trial, including the leader of the scheme, Bock, while many others awaited trial. As most perpetrators, excluding Bock, were Somali Americans, the scandal resulted in increased political attention on the community, including from the subsequent second Trump administration.[17]
The nonpartisan state legislative auditor's office later found that Feeding our Future's threats to accuse MDE of racism had affected the agency's judgment. An investigator from the state's fraud investigation office (who was himself Somali) said that concerns over being portrayed as racist made the Walz administration reluctant to pursue fraud allegations.[9]
Federal officials began investigations into EIDBI providers in December 2024, in connection with Feeding our Future investigations. At least a dozen defendants suspected of fraud related to Feeding our Future also owned or were associated with autism centers in Minnesota.[18] Federal officials charged several defendants in connection with EIDBI fraud in 2025. In December 2025, Asha Farhan Hassan plead guilty to stealing $14 million in EIDBI funding.[19]
Integrated Community Supports
Minnesota's Integrated Community Supports (ICS) program launched in 2021, intended to aid adults with disabilities. It initially cost the state $4.6 million a year when it launched in 2021, but "explosively grew" to nearly $180 million in 2025.[20] Fraudulent providers for ICS were suspected of failing to provide services that they billed to Minnesota. Lack of care has been connected to the death of at least one participant in ICS. Rick Clemmer, an ICS enrollee, died in 2025 from a medical emergency with nobody around to call for emergency services. His ICS provider, Abdul Ibrahim of Ultimate Home Health Services LLC, claimed he only checked on Clemmer once a day, despite Ultimate Home Health Services billing Minnesota for 12 hours of one on one care daily. In 2025, at least 17 providers were suspended by DHS due to credible allegations of fraud.[21][22]
In December 2025, the FBI raided Ultimate Home Health Services LLC, alleging that it billed for services that were never provided.[20]
Substance use disorder services
Evergreen was found to have billed for 203 hours of services provided by a single employee in a day. KARE11 broke the story in May 2024 after a whistleblower contacted them after she received no response from reporting Evergreen to DHS for months. Evergreen's CEO and CFO plead guilty to conspiracy to commit wire fraud in October 2025.[23][24]
Kyros, a for-profit company, was Minnesota's largest provider for addiction peer recovery services. It was founded by Daniel Larson, who also founded the non-profit Refocus Recovery. For-profit companies like Kyros may not bill Medicaid for peer recovery services, but non-profits like Refocus Recovery are able to. While nominally independent, 96% of Refocus Recovery's revenue went to subsidiaries of Kyros in 2022, effectively allowing Kyros to bill Medicaid through Refocus Recovery. The Alliance for Recovery Centered Organizations (ARCO) reported irregularities between Kyros and Refocus Recovery in 2022, but DHS granted certification for Refocus to continue billing Medicaid after the non-profit directly appealed to DHS commissioner Jodi Harpstead. A March 2024 KARE11 investigation found that Refocus Recovery also billed for services never provided and questionable services, like watching movies. DHS halted payments to Refocus Recovery in September 2024 and Kyros subsequently shut down.[25][26][27]
Nuway Alliance, a non-profit that served as one of the state's largest addiction treatment providers, was found to have obtained tens of millions of excess Medicaid payments by exploiting billing rules which allowed any amount over 30 minutes of services to be billed as an hour, resulting in double-billing of services in overlapping periods of time. Nuway would provide services for 35 minutes, bill for an hour, then provide another 35 minutes of services after a 10 minute break. Internal records from Nuway indicated that officials identified the billing practices as problematic. It was also found to have used illegal kickbacks by providing free housing as an incentive to recruit patients into its addiction recovery services. DHS halted payments to Nuway in February 2025. In June 2025, Nuway paid $18.5 million in a settlement to the US Attorney's Office, without admitting guilt.[28][29]
Home and Community Based Services
In January 2023, the offices of Home and Community Based Services (HCBS) provider Bridges MN were investigated by DHS for fraudulently billing $4 million in Medicaid funds. Prior to the investigation, Bridges had received two years of warning notices that its practices could be considered fraudulent, since they provided in-home health care to client who were living in residences that Bridges or its affiliates owned or had financial interests in, when Medicaid required that clients live in their own home. DHS investigators discovered that Bridges also had wide discrepancies between what they billed and the services they provided, including instances of 24 hours of services being billed in a day.[30][31]
In June 2024, the Minnesota Attorney General's office charged two defendants, Abdifatah Yusuf and his wife Lul Ahmed, of defrauding $7.2 million through a fake HCBS company called Promise Health Services LLC. The two were accused of overbilling, billing for services not provided, forging documentation, and recruiting HCBS clients through kickbacks. The couple allegedly spent Medicaid funds on personal luxury items. Yusuf was convicted by a jury in August 2025, but his conviction was subsequently overturned by Hennepin County Judge Sarah West. Judge West stated that while she was "troubled by the manner in which fraud was able to be perpetuated at Promise Health", she issued the acquittal because the state's case "relied heavily on circumstantial evidence" and there could be other "reasonable inferences". The jury foreperson in the trial expressed shock at the decision, stating, "It was not a difficult decision whatsoever. The deliberation took probably four hours at most. Based off of the state's evidence that was presented, it was beyond a reasonable doubt".[32][33]
Personal Care Assistance
In August 2023, 18 people involved in a Personal Care Assistance (PCA) company were charged in what the Attorney General's Office described as the largest case of fraud brought forward by its Medicaid Fraud Control Unit, which involved $9.5 million in stolen Medicaid funds through a fraudulent company, MN Professional. MN Professional was accused of billing Medicaid for services that were not provided and providing services without a nurse or qualified professional present. Prosecutors described the fraud as being concealed through an "elaborate cash-checking scheme" in which checks were written in the names of legitimate PCAs, whose identities were used to bill fraudulently by suspects that kept the money for themselves.[34][35]
In October 2023, several other PCA companies came under investigation by the Attorney General's office. They were found to have ties to Abdirashid Said, a PCA provider who was convicted in 2021 of theft by swindle. The companies were frequently located in the same buildings as each other and were typically run by individuals with family connections. KARE11 reported that the PCA fraud investigation was predominantly centered on Minneapolis's Somali community.[36]
In June 2024, the Attorney General's office charged Abdiweli Mohamud for PCA fraud in connection with Abdifatah Yusuf and Lul Ahmed's HCBS scheme. Mohamud operated Minnesota Home, which was accused of fraudulently billing Medicaid for $1.8 million.[32]
2025 developments
In January, Walz announced a task force to combat fraud, saying that his administration "had a culture of being a little too trusting".[37] State lawmakers passed some bipartisan anti-fraud measures in the 2025 Minnesota legislative session.[1] In October 2025, Walz's administration ordered that 14 "high-risk" Medicaid programs be audited and paused for up to 90 days "only if anomalies are found". Shireen Gandhi, the temporary Minnesota DHS commissioner, wrote to the federal government that these programs had been identified due to "vulnerabilities, evidence of fraudulent activity, or data analytics that revealed potentially suspicious patterns, claim anomalies, or outliers".[citation needed]
Joseph H. Thompson, Acting U.S. Attorney for Minnesota from June to October 2025; Thompson continued to be involved in fraud investigations following his term
In July, Acting U.S. Attorney for Minnesota Thompson told KSTP that fraud in Minnesota public programs exceeded $1 billion in ongoing investigations.[38] In November 2025, The New York Times reported that federal prosecutors had found more than $1 billion of fraud in three separate schemes.[9] Earlier exposés of fraud in COVID-19–era child-feeding programs and other safety-net benefits had largely been treated as one-off crimes. According to prosecutors, multiple front companies were registered to participate in state and federal programs and successfully billed for services that were never delivered.[9]
On November 19, conservative magazine City Journal alleged that some of the stolen funds had been sent abroad to fund the Somali terrorist group Al-Shabaab. The magazine cited three law enforcement officials, two of whom were anonymous.[39] The single official named as a source in the article later claimed to have been misquoted and disputed the allegation.[40] Two days later, Donald Trump announced on Truth Social that he would revoke the Temporary Protected Status of Somalis residing in Minnesota, writing, "Somali gangs are terrorizing the people of that great State." This was condemned by leaders of the Minnesota Democratic–Farmer–Labor Party. Among them was U.S. Representative Ilhan Omar, who argued that targeting a single state by revoking such statuses was illegal.
In December, Thompson alleged that among 14 different "high-risk" Medicaid programs run by the state, which provided $18 billion in funding since 2018, fraudulent payouts consisted of "half or more" of all funding. He further alleged that fraud had become so rampant in Minnesota that it attracted "fraud tourists" from outside the state, citing two Pennsylvania men who traveled to the state to enroll their companies in the state's Housing Stabilization Services program and subsequently filed fraudulent claims totaling $3.5 million. Thompson also said there was no evidence to support the direct transfer of state funds to Al-Shabaab, but that it could have indirectly acquired some of the money by taxing businesses in Somalia. As of December 2025, 82 out of 92 suspects indicted in the related Minnesota fraud cases were Somali American, according to the US Attorney's Office.[41]
YouTube video
Nick Shirley, who filmed the viral video alleging fraud at Somali-ran daycare centers
Shirley's video showed him visiting facilities that appeared empty or inactive, interviewing bystanders who said they had not seen children at the locations, and citing public payment records.[46][47] Police were called on Shirley twice during the video. At one health care complex, a woman told a responding officer that Shirley was "trying to assume because they're Somalian providers everyone here is fraudulent." Shirley told police he was "checking rates" for health and child care. Officers escorted him out of the building.[48]
Quality Learning Center
At the Quality Learning Center, Shirley cited locked doors, a misspelled sign on the outside of a business, and a nearly empty parking lot. A bystander told him he had never seen children at the facility.[48] “This is Quality ‘Learing’ Center,” Shirley said, pointing to the sign. “They spelled ‘learning’ wrong.”[49] According to CNN, the sign may now be the most infamous in the country.[50]
By December 30, on-site work had been started to fix the misspelling on the sign;[51] the center's manager Ibrahim Ali published a video claiming that Shirley's video was dishonest, and asked: "Are you trying to record that we're doing fraud, or are you trying to put the Somali name and fraud in the same sentence?"[52][53] He said the video was recorded outside operating hours; the center is open Monday through Thursday from 2 to 10 p.m., and he alleged Shirley arrived around 11 a.m. Ali said the center serves 50 to 80 children daily and employs about 25 people. "There's no fraud going on whatsoever", Ali said.[52]
On December 31, KSTP observed "a steady stream of kids and parents" at Quality Learning Center.[54]
By January 7, the center voluntarily ceased operations.[55] The center's last licensing review found 10 operational violations, and 121 violations from May 2022 to June 2025.[56] According to state House Speaker Lisa Demuth, the center was mentioned by The House fraud committee already in February 2025, as an "apparently vacant site".[57]
The center received $1.9 million of the state's funding in fiscal year 2025, and nearly $10 million since 2019.[58][59]
Other centers
Minnesota childcare workers Umi Hassan and Ahmed Hasan said Shirley's video was politically motivated.[60][42] Mini Childcare Center manager Ayan Jama said Shirley had visited the facility early in the morning, before it opened at noon; that the facility had received a bomb threat, which police confirmed; and that someone attempted to break into the facility. Jama asked Shirley, "Why not come during operating hours?" and said, "This is a targeted attack on our community."[61][62][63]
State Senator Erin Murphy expressed concern that Shirley's video put the state's child care industry at risk.[64]
A number of Minnesota child care employees reported receiving threatening phone calls after the video's publication.[60][42]KMSP reported that some day care workers felt harassed by the calls they received.[65] Washington State Attorney General Nick Brown said that he had received reports of Somali-run "daycare providers being harassed and accused of fraud with little to no fact-checking" in his state.[66][67] Police in Columbus, Ohio, responded to at least three reports of people attempting to visit Somali-immigrant operated daycare centers. Mayor Andrew Ginther called it a "trend" of trespassing and harassment and warned residents to report any more unlawful behavior.[68][69][70][71]
Nokomis Daycare Center in Minneapolis, which was not among the facilities featured in Shirley's video,[72] reported a break-in on December 30. Manager Nasrulah Mohamed said documents related to children and employees were stolen and attributed the incident to backlash from the video. He said the center had reported the incident to police and continued to receive threatening messages.[73]
Government response
FBI director Kash Patel said: "the FBI believes this is just the tip of a very large iceberg. We will continue to follow the money and protect children, and this investigation very much remains ongoing."[74] The Department of Homeland Security announced its own investigation into alleged fraud, while Small Business Administration head Kelly Loeffler suspended agency funding to Minnesota to "investigate $430 million in suspected PPP fraud across the state."[4]
Deputy Secretary of Health and Human ServicesJim O'Neill announced a freeze on $185 million in federal child care funding to Minnesota.[4] On December 31, the Department of Health and Human Services announced it would be freezing child care funding for all fifty states until each state could "prove they are being spent legitimately."[75]
On January 9, 2026, USDA secretary Brooke Rollins announced that the USDA would suspend financial awards to the state of Minnesota and city of Minneapolis, in response to "widespread and systemic fraud associated with federal benefit programs".[76]
Investigations
KSTP reported that the Minnesota Department of Human Services's Office of the Inspector General had 62 active investigations into child care centers in the state's Child Care Assistance Program.[77]
Five of the ten child care centers featured in Shirley's video had operated as meal distribution sites for Feeding Our Future, receiving nearly $5 million between 2018 and 2021. None of the five had been accused of wrongdoing in the Feeding Our Future case, in which 78 people were charged and more than 50 convicted.[78][79]
Minnesota Department of Children, Youth, and Families Commissioner Tikki Brown said officials "do take the concerns that the video raises about fraud very seriously" while questioning "some of the methods that were used in the video".[4] She said all the day care centers in the video had been inspected within the previous six months, and that children were present during those inspections. Brown said ongoing investigations into several of the centers had not uncovered evidence of fraud.[80] Brown said two centers had closed, including Quality Learning Center, whose sign misspelled "Learning" as "Learing".[80] A DCYF spokeswoman later said Quality Learning Center had notified the state it planned to close but then reversed that decision; the department also clarified that the second center, Mako Childcare Center, had closed in 2022.[81][82]
State records showed Sweet Angel Child Care had an unannounced inspection on December 4, 2025; a CBS News review found safety and cleanliness violations but no evidence of fraud.[42] On December 30, journalists from the Minnesota Star Tribune visited all 10 child care centers featured in Shirley's video. They found children inside four facilities that allowed them entry, including "about 50" at Minnesota Child Care Center. The remaining six were either closed or did not open their doors.[78]
A KSTP review of state licensing records found all the facilities Shirley visited had active licenses except for two that appeared to be permanently closed. The records showed the centers had between three and 10 safety violations; licensing records do not document fraud allegations or attendance.[54] At the state-licensed ABC Learning Center, security camera footage shared with CBS News purported to show "various people throughout the day dropping off young children" on the same day Shirley had visited and said it was empty.[42] At another center, a CNN camera crew filmed caregivers arriving with children while interviewing Shirley outside; he dismissed them as "showing face".[46]
Reactions
The video was recorded by Shirley alongside David Hoch, a registered lobbyist for the Minnesotans for Responsible Government group and former Resource Party politician.[83][84][85] Minnesota house speaker Lisa Demuth said the Republican caucus had been "working with Nick Shirley and agency whistleblowers" to hold Governor Walz "accountable". State representative Harry Niska said the party had given Hoch information.[86][64] Hoch told CNN he obtained the information from publicly available websites, not from Republican politicians.[4]
NBC News called the allegations "unsubstantiated".[3] CNN described the video as including limited evidence for the allegations and said that Shirley has created anti-immigrant and anti-Muslim videos in the past.[4] Shirley defended his videos, saying, "fraud is fraud—it doesn't matter if it's a Black person, White person, Asian person, Mexican...and we work too hard simply just to be paying taxes and enabling fraud to be happening".[48] In response to media coverage of his Minnesota fraud video, Shirley wrote on X: "I am not an enemy of the people, they are", referring to mainstream media.[87]
Republicans such as Vice President JD Vance (left) were more supportive of Shirley's video, while Democrats such as DFL Chair Richard Carlbom (right) were more critical.
Vice President JD Vance shared Shirley's video, writing that he had "done far more useful journalism than any of the winners of the 2024 Pulitzer Prizes."[88]Elon Musk also shared the video.[4] Republican representative Tom Emmer said he was calling for "the denaturalization and deportation of every Somali engaged in fraud in Minnesota".[53] President Trump also "signaled an interest in increasing his deportation efforts in the state by focusing on Somali immigrants" earlier in December.[89] Several of Trump’s comments received criticism for racially-charged and unsubstantiated invective directed towards Somali immigrants and Representative Ilhan Omar.[3]
Democratic leader Richard Carlbom alleged that Minnesota House Speaker Lisa Demuth had "admitted" that "Minnesota Republicans chose to partner with a YouTube conspiracy theorist".[citation needed]
Governor Tim Walz faced criticism following the November controversy, with the editorial board of The Washington Post accusing him of "refusing to take accountability".[90] Since the scandal, political analyst Ember Reichgott Junge has said that Walz's reelection (and potential future presidential) prospects have dimmed.[89] Polling showed Walz's approval rating at its lowest since the beginning of his second term.[91]
Members of the Minnesota Legislature's Republican caucus called on Walz to resign. Walz responded by saying that he had "strengthened oversight", citing his creation of an anti-fraud task force and investigations already launched by his office into several sites, including one featured in Shirley's video.[92] His office and the state attorney also disputed federal claims that overall fraud losses were $9 billion.[93]
On December 31, 2025, he was invited to testify alongside a group of Republican state legislators at the Oversight Commmittee of the U.S. House.[94] The Washington Examiner reported that Walz had received "nearly $10,000 in campaign contributions from supporters connected to Somali-operated day care centers".[95] At the House Oversight Committee hearing held on January 7, 2026, Minnesota representative and chair of a Minnesota House fraud prevention committee, Kristin Robbins, alleged that Walz and his administration retaliated against whistleblowers and "have willfully turned a blind eye to crime in the face of countless whistleblower and auditor reports."[96]
Walz said the Trump administration was "politicizing the issue to defund programs that help Minnesotans".[42] On December 29, Walz said, "This is what happens when they scapegoat and this is what then happens when they no longer hide the idea of white supremacy."[97]
On January 5, 2026, Tim Walz announced he would not seek re-election to a third term due to the fraud scandals. According to an official statement by him, "[e]very minute I spend defending my own political interests would be a minute I can’t spend defending the people of Minnesota against the criminals who prey on our generosity and the cynics who prey on our differences." The withdrawal was a surprise, given Walz did not face any major primary challengers and had previously announced he intended to seek re-election.[7]
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