Minnesota day care fraud exposed, surveillance footage reveals how parents and providers colluded to bilk millions in state funds

Newly resurfaced surveillance footage from Minnesota reveals the inner workings of an alleged multi-million-dollar child care fraud, showing parents signing their children into day care centers for full days of care only to leave minutes later, allowing providers to bill the state for services never rendered.

Recorded in 2015 but publicly exposed in 2018, the clips also show alleged kickback payments to parents who participated in the scheme.



Authorities say the scam persisted for years, with some centers submitting claims even on days when no children were present, and investigators describe it as part of a broader pattern of abuse of public funds, with federal agencies now deployed to dismantle the network and prevent further exploitation of state programs.

Surveillance footage from 2015 obtained by Fox 9 shows parents signing children into day cares could falsely bill the state for full-day care. At times, no children attended the centers, yet the day cares reportedly still submitted reimbursement claims to the government.

The purportedly fake day care centers reportedly paid kickbacks to participating parents.

Another Fox 9 video shows a man giving a parent an envelope, allegedly containing a kickback for taking part in the scheme.

Recorded in 2015 and revealed in 2018, the footage resurfaced amid outrage after a viral video from independent journalist Nick Shirley exposed inactive Minnesota day care centers that still received millions in state funds.

US Education Secretary Linda McMahon labeled the alleged scheme a “breathtaking failure.”

Minnesota authorities began investigating in 2014, and by 2018, dozens of businesses were suspected of defrauding the state of millions through bogus child care services.

Minnesota Gov. Tim Walz has also faced criticism over alleged Medicaid-funded disability scams, including a housing program for seniors and people with disabilities. Authorities say the scams have been largely linked to Minnesota’s migrant Somali community.

FBI Director Kash Patel stated that the agency has sent personnel and resources to Minnesota to “dismantle large-scale fraud schemes exploiting federal programs.” Patel described the child care allegations as “just the tip of a very large iceberg” and warned that convicted Somali scammers could face deportation.