Nick Shirley's video tour of ten Somali daycare centers in the Twin Cities has once again spotlighted the extensive fraud within public programs, predominantly orchestrated by Somali Minnesotans.
While Shirley may have erred in some aspects, his findings appear to be significant.
According to The Washington Free Beacon, Shirley's video underscores concerns about the Child Care Assistance Program managed by Minnesota's Department of Human Services. In 2019, a report from Minnesota's nonpartisan Office of Legislative Auditor investigated a whistleblower's claim of fraud amounting to $100 million within the program. Legislative Auditor James Nobles confined his fraud findings to amounts proven in criminal convictions, which ranged from $5 to $6 million at the time.
However, Nobles criticized the program for its lax oversight and inadequate controls, stating in a recent column that the department's lenient approach "made it easy for fraudsters to steal."
Local reporters in the Twin Cities have previously covered the daycare fraud issue, both before and after the 2019 report. A year ago, Jay Kolls of KSTP EyeWitness News visited two of the ten sites Shirley examined, revealing an inspector general's report that found 95 violations at one site, including "no records for 16 children" and "failure to keep hazardous items away from children."
Like Shirley, Kolls discovered no children present at the daycare center, yet taxpayer funds continued to be disbursed. Fox 9 reporter Jeff Baillon had also reported on daycare frauds in 2013 and 2015.
The recent revelations of brazen thefts from federally funded Minnesota programs have sparked outrage among those unfamiliar with the situation, prompting questions about potential solutions to what prosecutors have termed "industrial-scale fraud." Federal authorities are acutely aware of the issue and are actively pursuing cases, though they are overwhelmed by the sheer volume of fraud.
There is a pressing need for additional prosecutors to join the team at the United States Attorney's office in Minnesota, as the demand for reinforcements grows.
At a September press conference, First Assistant U.S. Attorney Joe Thompson emphatically highlighted the pervasive fraud in Minnesota's Medicaid programs, which are designed and administered by the state. "I want to be clear on the scope of the crisis," he declared. "What we see are schemes stacked upon schemes, draining resources meant for those in need. It feels never-ending. I have spent my career as a fraud prosecutor and the depth of the fraud in Minnesota takes my breath away."
To illustrate Thompson's point about "schemes stacked upon schemes," two Minnesota Star Tribune reporters fact-checked Shirley's video. They discovered that five of the ten daycare businesses he visited operated as meal sites sponsored by Feeding Our Future, receiving nearly $5 million in payments between 2018 and 2021, "according to trial evidence." This evidence was part of the government exhibit introduced during the second Feeding Our Future trial, which led to the conviction of Feeding Our Future executive director Aimee Bock for fraud, conspiracy, and public programs bribery. The exhibit documented $240 million in claims by the Feeding Our Future sites.
Thompson has consistently emphasized the staggering nature of the fraud, doing everything possible with a small team of five prosecutors, including himself. However, he has made it clear that more prosecutors are needed to address the issue effectively. On December 18, Thompson held a particularly intense press conference, announcing charges against six more defendants in cases related to fraud in Minnesota's "waivered" Medicaid programs. He warned of additional cases on the horizon, estimating that fraud may account for half of the $18 billion spent on these programs since 2018. As President Trump aptly puts it, that's BILLIONS.
"Every day we look under a rock and find a new $50 million fraud scheme," Thompson remarked, noting that fraudsters are now targeting the state, which has "developed a fraud tourism industry." Among the documents provided to reporters at the briefing, the most significant was an unsealed search warrant executed on the day of the press conference in one of the ongoing investigations. The suspected fraud in this case involved Minnesota's Integrated Community Supports Medicaid program.
The ICS program has experienced explosive growth since its inception in 2021. After disbursing approximately $4.6 million in 2021, the program's costs have ballooned to over $170 million in 2024. In total, claims data indicate that the Medicaid system has paid out more than $400 million for ICS services since 2021. This pattern mirrors the fraud uncovered in Minnesota's waivered Medicaid programs and extends to fraudulent claims related to autism care benefits. From less than $1 million in 2018, these claims have surged to over $300 million in 2024.
While Shirley's 42-minute video is disconcerting, the potential daycare fraud it highlights is relatively minor compared to the broader fraud issues plaguing these programs. Prosecutors are currently focusing on cases that promise the greatest deterrent effect for the resources involved.
A more comprehensive approach would be ideal, but for now, Joe Thompson needs reinforcements to tackle the pervasive fraud. Scott W. Johnson, a retired Minneapolis attorney and contributor to Power Line, emphasizes the urgency of the situation, calling for additional support to address the crisis.
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