Inside Minnesota's $100M daycare fraud allegations

millions of dollars set aside for needy children allegedly stolen from Minnesota taxpayers instead it was used for lavish vacations and properties abroad several federal agencies now say they are getting involved Scripps News national correspondent Alex Miller joins us live now from New York with the very latest and Alex the story in many ways it is not new so how do we get here

you're right Del this story is more than three years old it all began in two thousand twenty two under the Biden administration. We saw indictments and by the time those indictments were finished, 78 people were charged in relation to a fraud scheme that totaled $250 million for funding that was for a nonprofit that was supposed to help hungry children. It was called Feeding Our Future.

And in that scheme, some 78 people that were charged, 72 of them were from Somalia. And in these allegations, money was pocketed and sent to other countries like Somalia, Kenya, China. This money was used for waterfront properties. I want to play you a clip from the press conference announcing those charges back in 2022

They use this money that was supposed to be used for feeding children to buy houses in Minnesota resort property and real estate in Kenya and Turkey luxury cars commercial property

jewelry and much more.

Now, Del, look at this timeline. We put together this timeline looking at all of the fraud schemes that we have seen and how they all unfolded in Minnesota. First, we saw what we just talked about in 2022. Then fast forward to September of this year,

there were charges, eight charges in September related to federally funded health care benefits from the Minnesota Housing Stability Services Program. Six of the eight of those defendants are Somali. Also in September, one woman was charged in an autism program fraud scheme. She had also already been charged back in 2022 with that feeding our future. She also is Somali. The

reason that I'm mentioning this is because of all the charges we've seen. 91% of those charges have been to those of Somali descent. Then in November of this year, the conservative outlet City Journal, they reported that some of this money had gone to Al Shabaab, which is a terror affiliate of Al Qaeda based in Somalia. And so, uh, even though the City Journal has reported this and they are standing by their reporting, the Department of Treasury says they haven't seen any proof of this and no charges have

resulted in connection to terror funding thus far. Then on December 18th, more charges were announced related to fraud in Minnesota. And then just a couple of days ago, we saw a 23 old youtuber Nick Shirley releasing this 43 minute video. I want to play this video for you. This building named Quality Learning Center, you can see the misspelling there, Quality Leering Center. This is one of the clips of daycare facilities that he went to. He alleges 1. million dollars went to this facility

this year alone. We're working to corroborate that number. But it's unclear whether he was there during business hours. As you can see, he says in this video he was there midday. But it's important to note that this center does not actually open until 2 p.m. So it's unclear whether he entered or tried to enter this facility before it was even open. Now I just got off the state's licensing website which by the way had crashed all morning long. This facility in particular still has an active license to serve 99 children through December 21st 2026 but

they have gotten repeated violation 10 in June that included the staff that they had not completed training requirements, that children weren't put in the correct age categories, that they had supervision issues, that the areas were not in repair. There were three more violations earlier this year in March. And so there is investigations pending into some of these facilities. But I think it's worth noting that all of these, this viral video and some of the criticism and

pushback we've seen so far, comes as the president called the Somali community garbage earlier this month and said that he doesn't want them in the United States, Del. Minnesota is home to the largest Somali population in the United States. Some 80,000 Somali Americans are living in Minnesota right now. So Alex that being said what are the feds saying? Well they are getting involved and we've seen them on the ground right away. The Department

of Homeland Security posting a video showing their officials on the ground conducting investigations that they say are necessary of some of these facilities. You're looking at that video right now going door to door, they say, on these suspected fraud sites. And then you have the FBI getting involved, Director Cash Patel saying that they're surging

resources, saying in part in a Twitter post that it is the tip of an iceberg, essentially, something that they are looking into there, as well as the Small Business Association, Kelly Loeffler, the head of the business association there, saying on social media that they are also pausing annual funding, they're pending an investigation.

And then of course, lastly, Congress getting involved as well, saying that the House Oversight Committee is getting involved, continuing their investigation of this according to the chairman James Comer as well. So you're seeing lots of officials within the Trump administration kind of getting involved in this of course worth noting this is a state run by a Democrat and something that the administration says that they need to pay attention to as

well. Alex that being said before I let you go Governor Tim Walz been in the hot seat over this you

just heard from his office what are they saying? Well they are pushing back on the criticism that they have been receiving from this sending us a really lengthy statement in part saying that the federal government has fraud as well and then saying that they are combating this and have been for years before this viral video came out. He said that they had already referred these cases to law enforcement and has asked the state legislature for more authority to take

aggressive action. They say that Walls, his team has said that he has strengthened oversight and launched investigations into these specific facilities and has even hired an outside firm to audit payments. So they say that he's taking the appropriate action, but obviously we are in the middle of a gubernatorial election. Tim Walz is running for a third term, so he is definitely getting the brunt of the focus of the fact that we are seeing these new charges come out in December all the way stemming back through

2022 while he was also a governor

Yeah, interesting that you showed that news conference from 2022 an indication that this has been an ongoing problem Yeah, interesting that you showed that news conference from 2022 an indication that this has been an ongoing problem Descriptions national correspondent Alex Miller live for us in New York Alex. Thank you