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Justice Dept. to surge prosecutors to Minnesota amid fraud allegations

By Sarah N. Lynch, Jennifer Jacobs

/ CBS News

The Justice Department is sending a team of federal prosecutors to Minnesota to help investigate allegations of widespread fraud within the state's social services programs, U.S. officials told CBS News Wednesday.

The department emailed federal prosecutors who work in other U.S. attorney's offices on Tuesday to seek volunteers for the surge, according to a person briefed on the request.

Attorney General Pam Bondi told CBS News in a statement that the department was sending the prosecutors to Minnesota "to reinforce our U.S. Attorney's Office and put perpetrators of this widespread fraud behind bars." 

"We will deliver severe consequences in Minnesota and stand ready to deploy to any other state where similar fraud schemes are robbing American taxpayers," Bondi said.

The Justice Department has intensified efforts to investigate fraud in the state after a social media video shared by YouTuber Nick Shirley went viral right before New Year's Day. Shirley alleged in the video that nearly a dozen day care centers in Minnesota that are receiving public funds are not actually providing any child care services.

The video has been praised by Bondi, as well as Vice President JD Vance and Elon Musk.

The Minnesota Department of Children, Youth, and Families has since cast doubt on the accuracy of the video, saying that a review by the state's Office of Inspector General found that nine of the centers were "operating as expected."

A separate CBS analysis, meanwhile, found that all but two have active licenses, according to state records, and all active locations were visited by state regulators within the last six months.

One of the Minneapolis day care centers featured in Shirley's video is now closed, according to state records. Quality Learning Center closed Tuesday, according to the Minnesota Department of Human Services' . CBS station WCCO is investigating the reason for the closure, which is not yet publicly known. The center's last licensing review in June found operational violations but noted no evidence of fraud.

Though most of the centers have active licenses, the daycare fraud allegations have taken a toll on Minnesota Gov. Tim Walz, who announced this week he is dropping out of the 2026 gubernatorial race amid rising tensions over his handling of the matter.

The allegations surrounding the daycare facilities are among several fraud cases to hit the state. Federal prosecutors have separately alleged Minnesota is also facing a $9 billion COVID-era fraud scandal — a figure that state officials have disputed.

The COVID fraud scheme has centered on a nonprofit group called Feeding Our Future, and has led to charges against more than 75 defendants.

The group, which works with restaurants and caterers to distribute meals to schools, was accused of sending fake meal-count sheets and invoices.

In response to the fraud allegations, the Trump administration has begun to halt some federal funding to Minnesota. In late December, the Department of Health and Human Services said it has frozen federal child care funding for the state. 

An HHS official also said it was freezing billions in social services funding for five states led by Democrats, including Minnesota. The administration is withholding $7 billion for the Temporary Assistance for Needy Families program, nearly $2.4 billion for the Child Care Development Fund and roughly $870 million for social services grants.

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