Minnesota

Dec. 30 (UPI) — U.S. Department of Health and Human Services officials have frozen federal child care funding to Minnesota amid accusations of fraud in that state and others.

HHS officials announced the action on Tuesday and credited a viral video that suggests rampant fraud is occurring at Minnesota child care centers that provide daycare services for few, if any, children.

“You have probably read the serious allegations that the state of Minnesota has funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade,” said Jim O’Neill, HHS deputy secretary, in a social media post on Tuesday.

In response to the “blatant fraud that appears to be rampant in Minnesota and across the country,” O’Neill said HHS officials have taken three actions.

One is to require justification and a receipt or photo evidence before sending federal Administration for Children and Family funds to a state.

HHS also launched a fraud-reporting hotline and email address, and identified individuals shown in a viral social media video at Minnesota daycare centers that appeared to have no children.

“I have demanded from [Minnesota] Gov. Tim Walz a comprehensive audit of these centers,” O’Neill said. “This includes attendance records, licenses, complaints, investigations and inspections.”

Conservative activist Nick Shirley recorded and posted the viral video, which, along with FBI evidence, spurred U.S. Department of Homeland Security Sec. Kristi Noem on Monday to launch what she called a “massive investigation on childcare and other rampant fraud,” according to CBS News.

Minnesota Department of Children, Youth and Families Commissioner Tikki Brown told CBS News the department questions “some of the methods used in the video” but takes the fraud concerns raised in Shirley’s video “very seriously.”

State officials visited some of the daycare centers featured in the video and said two of them were closed earlier this year, but officials at one said they intend to resume operations.

CBS News looked at the records for several of the daycares cited and said all but two have active licenses to operate in Minnesota.

State records show all of the active locations had been visited by state regulators over the past six months, with no evidence of fraud found, but citations were issued for staff training, safety, equipment, and cleanliness violations.

The alleged daycare fraud comes amid federal investigations of 14 Medicaid-funded programs in Minnesota, but none involved child care.

Among them is an investigation into the Feeding Our Future program that was intended to feed at-risk children during the COVID-19 pandemic but has triggered dozens of federal fraud convictions and has embroiled Rep. Ilhan Omar, D-Minn., who helped to promote it.

That alleged fraud cost an estimated $250 million and largely occurred within the Somali community in the greater Minneapolis-St. Paul area, which prompted President Donald Trump to halt Temporary Protected Status for Somalians in Minnesota.

MINNEAPOLIS — A surge of federal officers in Minnesota follows new allegations of fraud by day care centers run by Somali residents.

President Trump has previously linked his administration’s immigration crackdown against Minnesota’s large Somali community to a series of fraud cases involving government programs in which most of the defendants have roots in the east African country.

Surge in federal officers

Department of Homeland Security Secretary Kristi Noem and FBI Director Kash Patel both announced an increase in operations in Minnesota this week. The move comes after a right-wing influencer posted a video Friday claiming he had found that day care centers operated by Somali residents in Minneapolis had committed up to $100 million in fraud.

Tikki Brown, commissioner of the Minnesota Department of Children, Youth, and Families, said at a Monday news conference that state regulators took the influencer’s allegations seriously.

Noem posted on social media that officers were “conducting a massive investigation on childcare and other rampant fraud.” Patel said the intent was to “dismantle large-scale fraud schemes exploiting federal programs.”

Past fraud in Minnesota

Minnesota has been under the spotlight for years for Medicaid fraud, including a massive $300-million pandemic fraud case involving the nonprofit Feeding Our Future. Prosecutors said it was the country’s largest COVID-19-related fraud scam and that defendants exploited a state-run, federally funded program intended to provide food for children.
In 2022, during President Biden’s administration, 47 people were charged. The number of defendants has grown to 78 throughout the ongoing investigation.

So far, 57 people have been convicted, either because they pleaded guilty or lost at trial.

Most of the defendants are of Somali descent.

Numerous other fraud cases are being investigated, including new allegations focused on child care centers.

In news interviews and releases over the summer, prosecutor Joe Thompson estimated the loss from all fraud cases could exceed $1 billion. Earlier this month, a federal prosecutor alleged that half or more of the roughly $18 billion in federal funds that supported 14 programs in Minnesota since 2018 may have been stolen.

Crackdown targeting Somalis

Trump’s immigration enforcement in Minnesota has focused on the Somali community in the Minneapolis-St. Paul area, which is the largest in the country.

Trump labeled Minnesota Somalis as “garbage” and said he didn’t want them in the United States.

About 84,000 of the 260,000 Somalis in the U.S. live in the Minneapolis-St. Paul area. The overwhelming majority are U.S. citizens. Almost 58% were born in the U.S and 87% of the foreign-born are naturalized citizens.

Among those running schemes to get funds for child nutrition, housing services and autism programs, 82 of the 92 defendants are Somali Americans, according to the U.S. attorney’s office for Minnesota.

Republicans have tried to blame Walz

Minnesota Gov. Tim Walz, the 2024 Democratic vice presidential nominee, has said fraud will not be tolerated and his administration “will continue to work with federal partners to ensure fraud is stopped and fraudsters are caught.”

The fraud could be a major issue in the 2026 gubernatorial race as Walz seeks a third term.

Walz has said an audit due by late January should give a better picture of the extent of the fraud but allowed that the $1-billion estimate could be accurate. He said his administration is taking aggressive action to prevent additional fraud. He has long defended how his administration responded.

Minnesota’s most prominent Somali American, Democratic U.S. Rep. Ilhan Omar, has urged people not to blame an entire community for the actions of a relative few.

Dec. 16 (UPI) — Minnesota Attorney General Keith Ellison announced Tuesday a bipartisan settlement between 35 states and automakers Hyundai and Kia over selling millions of vehicles without standard anti-theft technology.

Hyundai and Kia’s alleged omission of standard security technology fueled a surge of car thefts, enabled further crime and caused deaths nationwide, including in Minnesota, Ellison’s office announced.

“Maintaining public safety means holding people who commit crimes accountable, but it also means holding corporations accountable when their greed helps criminals harm the people of Minnesota,” Ellison said in a statement.

A 2015 report found that just 26% of Kia and Hyundai cars sold in the U.S. had engine immobilizers, while other makers averaged 96%.

Under the settlement, Hyundai and Kia will give eligible owners free ignition cylinder protectors, add engine immobilizers to all future U.S. vehicles and provide up to $4.5 million in restitution for theft damages.

In addition, they will pay another $4.5 million to cover state investigation costs.

The settlement concludes Minnesota’s March 2023 investigation into Kia and Hyundai for knowingly omitting standard anti-theft tech from their manufactured cars.

Minnesota’s chief law enforcement official stated that Hyundai and Kia “unleashed a wave of auto thefts that cost Minnesotans their cars, their hard-earned money, and sometimes even their lives.”

“In short, they put their profits ahead of people’s safety,” he added.

The multi-state legal effort included Arizona, Colorado, the District of Columbia, Georgia, Hawaii, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Mississippi, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Vermont and Wisconsin.

Maryland Attorney General Anthony Brown said in a statement that Tuesday’s settlement revelation “should prevent these thefts from continuing and provides additional relief” to victimized consumers.

In 2022, Minneapolis saw Kia and Hyundai thefts linked to a slew of violent crimes and hundreds of crashes, in addition to New York and multiple states.

On Tuesday, Minneapolis Police Chief Brian O’Hara said the manufacturer’s “lack of urgency and their desire to save money inexcusably prolonged this crisis.”

“Now, the companies must take measures to protect their vehicles from theft,” New York Attorney General Letitia James posted on X.

Meanwhile, consumers who had or were scheduled for software updates but still experienced theft or attempted theft on or after April may file a claim for related expenses.