The Trump administration has ‘turned off the money spigot’ as it uncovers alleged fraud, HHS Deputy Secretary Jim O’Neill said.
The Department of Health and Human Services announced Tuesday that it is halting all funding for child care to Minnesota as federal investigations into alleged systemwide fraud continue to grow this week.
“We have frozen all child care payments to the state of Minnesota,” HHS Deputy Secretary Jim O’Neill wrote on X. “We have turned off the money spigot and we are finding the fraud.”
The department has also taken action to fight fraud, which O’Neil said appears to be rampant in Minnesota and across the country.
O’Neill said he believes the state has allowed scammers and fake day care centers to siphon millions of taxpayer dollars over the past decade.
Health and Human Services provides Minnesota with $185 million in child care funding each year, according to Assistant Secretary Alex Adams, who oversees the program.
“That money should be helping 19,000 American children including toddlers and infants,” Adams said in a video posted on X Tuesday. “Any dollar stolen by fraudsters is stolen from those children.”
Adams said he spoke directly with Minnesota’s director of child care services about the alleged fraud. “She couldn’t tell me with confidence whether those allegations of fraud are isolated or whether there was fraud stretching statewide,” he said.
Beginning Tuesday, the department will require photo evidence before sending any Administration for Children and Families funds to any state.
O’Neill also sent a letter requesting Minnesota’s Gov. Tim Walz conduct a comprehensive audit of the child care centers involved in the alleged fraud, including investigating attendance records, licenses, complaints, investigations, and inspections.
The department has also launched a dedicated fraud reporting hotline and email address at childcare.gov for parents, providers, or the public.
“Anyone who is involved in perpetrating this fraud against the American people should expect to be prosecuted to the fullest extent of the law,” O’Neill said.
Federal agents surged into the state Monday for a massive investigation into alleged fraudulent activity in child care operations, according to Homeland Security Secretary Kristi Noem.
Agents were going door to door at suspected fraud sites, the agency reported.
Federal authorities estimate about $9 billion has been lost to fraudulent claims in the state’s federal-assistance programs.
By Jill McLaughlin and Troy Myers
