‘We have turned off the money spigot’: HHS freezes all childcare payments to Minnesota in wake of fraud allegations

The Health and Human Services Department on Tuesday announced it is freezing all childcare payments to Minnesota amid allegations of widespread fraud.

“We have turned off the money spigot,” HHS Deputy Secretary Jim O’Neill said.

The HHS took three actions against the rampant fraud in Minnesota: All payments across the country will require justification and photo evidence before money is sent to a state.

All individuals in Nick Shirley’s video have been identified and audits have been demanded.

The HHS has also launched a fraud reporting hotline.

Full statement from Jim O’Neill:

We have frozen all child care payments to the state of Minnesota.

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.

Today we have taken three actions against the blatant fraud that appears to be rampant in Minnesota and across the country:

1. I have activated our defend the spend system for all ACF payments. Starting today, all ACF payments across America will require a justification and a receipt or photo evidence before we send money to a state.

2. Alex Adams and I have identified the individuals in @nickshirleyy’s excellent work. I have demanded from @GovTimWalz a comprehensive audit of these centers. This includes attendance records, licenses, complaints, investigations, and inspections.

3. We have launched a dedicated fraud-reporting hotline and email address at https://childcare.gov Whether you are a parent, provider, or member of the general public, we want to hear from you.

We have turned off the money spigot and we are finding the fraud.

We have frozen all child care payments to the state of Minnesota.

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.

Today we have taken three actions…

— Deputy Secretary Jim O’Neill (@HHS_Jim) December 30, 2025

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