Federal authorities launched a highly visible enforcement action in Minneapolis this week as part of a sweeping investigation into alleged fraud involving taxpayer-funded programs, according to statements from the Department of Homeland Security and its leadership.
Homeland Security Secretary Kristi Noem said Monday that federal investigators were actively operating in the city as part of a broader crackdown. “Homeland Security Investigations @ICEGov are on the ground in Minneapolis right now conducting a massive investigation on childcare and other rampant fraud,” Noem wrote on the social platform X, adding, “More coming.”
The Department of Homeland Security echoed that message in a separate post, saying agents were “going DOOR TO DOOR at suspected fraud sites.” DHS added that enforcement actions would follow when wrongdoing is uncovered, stating, “The American people deserve answers on how their taxpayer money is being used and ARRESTS when abuse is found. Under the leadership of @Sec_Noem, DHS is working to deliver results.”
Both posts included brief video clips showing two federal investigators wearing jackets marked “Police HSI” as they questioned individuals who appeared to be employees at business locations. In the videos, the agents asked about business operations and funding, signaling an on-the-ground approach that went beyond paperwork reviews or audits.
The renewed attention on Minnesota comes amid growing scrutiny of alleged fraud in the state’s social services and childcare systems. The issue gained national traction last week after independent journalist Nick Shirley released a viral video showing a daycare facility that appeared largely inactive despite receiving substantial state funding. The footage fueled criticism from conservative commentators and several members of the Trump administration, who argued that Minnesota officials had failed to adequately police misuse of public funds.
Those accusations have focused in part on Democratic Gov. Tim Walz, whose office has strongly rejected claims that the state ignored or enabled fraud. State officials have pointed to previous investigations and cooperation with federal authorities as evidence that Minnesota has taken the issue seriously.
Earlier this month, federal prosecutors announced a major expansion of an existing investigation into alleged fraud within Minnesota’s social services system. What initially centered on three state-run safety net programs has now widened to include suspicious billing practices across 14 Medicaid-funded programs. According to reporting by The New York Times, authorities believe a preliminary assessment indicates that more than half of the $18 billion spent on those programs may have been improperly claimed or stolen.
To date, prosecutors have charged 92 people in connection with the alleged fraud. The Times previously reported that all but eight of the 86 individuals charged earlier in the case were of Somali ancestry. Six additional people were charged as the investigation expanded this month.
The demographic breakdown of the cases has raised concerns among some Minnesota officials and community leaders, who worry that the investigation risks unfairly targeting the state’s Somali community. Those concerns have intensified as the Trump administration has highlighted the case as part of a broader immigration crackdown.
Walz has pushed back against what he describes as politicization of the investigation, while emphasizing that criminal behavior should be punished. “Sitting on the sidelines and throwing out accusations — and let’s be very clear, demonizing an entire population and lying to people about the safety and security of this state — is beneath that,” Walz previously said, according to The Associated Press. He has also maintained that anyone found guilty of fraud should go to prison.
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