Nine daycare providers in Minnesota collected more than $67 million in public childcare subsidies over eight years, and several of those same centers were raided by federal agents last week as part of a sprawling fraud probe, Fox News Digital reported after a local investigation unearthed the payment records.
The FBI and other law enforcement agents executed 22 search warrants at daycare and autism centers across the state. No charges have been filed. But the payment data behind those nine providers tells a story that should alarm every taxpayer in the state, and every federal official responsible for the money pipeline that made it possible.
State payments through Minnesota's Child Care Assistance Program to those nine centers more than doubled in the final two years of publicly available data, jumping from around $8 million in 2023 to over $16 million in 2025. The number of students served, meanwhile, remained steady. Payments doubled. Enrollment didn't budge. That gap is exactly the kind of pattern investigators look for when they suspect billing fraud.
The payment figures emerged through an investigation by Minneapolis ABC affiliate KSTP, which examined state records tied to the Child Care Assistance Program. KSTP reported that the full list of daycare centers raided last week has not been released by authorities, but that public records confirm several of the targeted sites receive CCAP subsidies.
Getting those records was itself a fight. KSTP filed a public records request with the Minnesota Department of Children, Youth, and Families, the agency that administers CCAP, and was ignored. The station then turned to state Rep. Kristin Robbins, who chairs the House Fraud Prevention and State Agency Oversight Committee. When Robbins made the same request, DCYF handed over the records, documents, and data.
That sequence matters. A news organization asks for public records and gets silence. A legislative committee chair asks for the same documents and gets compliance. The agency apparently understood its legal obligations, it just chose not to honor them until someone with subpoena power came knocking.
Fox News Digital reached out to DCYF for comment but did not receive a response before publication. The FBI, the Department of Justice, and the U.S. Attorney's Office in Minnesota were also contacted. The Department of Health and Human Services' Administration for Children and Families offered only a terse reply: "ACF does not comment on ongoing litigation."
The state has been down this road. In January 2022, FBI agents raided the offices of Feeding Our Future, a Minnesota nonprofit in St. Anthony, along with the home of its executive director, Aimee Bock. That case involved accusations that the group's partners defrauded the federal government of millions of dollars, and it became one of the largest pandemic-era fraud prosecutions in the country.
Now, more than four years later, federal agents are back in Minnesota executing search warrants at daycare facilities. The scale is different. The program is different. But the underlying vulnerability, a publicly funded system that pays providers with minimal verification, looks disturbingly familiar. Attorney General Keith Ellison has faced fresh scrutiny over his office's handling of the earlier Feeding Our Future case, with questions about transparency that echo the stonewalling KSTP encountered from DCYF.
Former Minnesota Attorney General Lori Swanson told KSTP that the scope of last week's warrants suggests investigators are looking for evidence that publicly funded services were actually provided. She pointed to the explosive growth in payments as a red flag.
"Whether it's a business, a school, a nonprofit, if something grows that much, you know, makes sense to ask why is it growing that much and how could it grow so fast."
Swanson framed the central question plainly: "The question is, 'were services billed to the government that weren't rendered?'"
The payment records are damaging enough on their own. But testimony from a former state investigator suggests the problem runs deeper than negligence. Former Department of Human Services investigator Jay Swanson testified that a senior DHS official ordered him to delete portions of a document describing fraud trends before it was sent to the Office of the Legislative Auditor, according to Breitbart.
Jay Swanson said he refused, telling the official he believed complying would be illegal. The retaliation, he testified, was swift. Investigators in his unit were harassed and pressured after resisting efforts to downplay or suppress child care fraud findings. DHS even paid a consultant to discredit the fraud allegations, he said, and put the investigative unit through a lengthy process that consumed time and sharply reduced its ability to do actual investigative work.
If that testimony holds up, it describes something worse than a bureaucratic failure to catch fraud. It describes an active effort to prevent the fraud from being documented, a coverup dressed up as process.
Against this backdrop, the Minnesota House Republican Caucus posted on X that Democrats had recently killed a bill designed to increase oversight and fraud penalties for child care providers receiving high amounts of CCAP funding.
"Just last week, Democrats killed a bill to increase oversight and fraud penalties for child care providers receiving high amounts of CCAP funding, like these nine providers."
The timing is difficult to explain away. Federal agents execute 22 search warrants at daycare centers. State records show payments to nine providers doubled while enrollment held flat. A former investigator testifies that the state tried to suppress fraud findings. And Democrats in the legislature respond by blocking a bill to tighten oversight of the very providers now under investigation.
At the federal level, Republican senators have already moved to address the structural weakness that makes this kind of billing fraud possible. Sens. Ted Cruz, Mike Lee, and Tim Scott introduced legislation to end the prepayment rule that allowed providers to collect taxpayer money before services were delivered, the exact mechanism that invites abuse.
The Trump administration has also acted. HHS announced plans to tighten Child Care and Development Fund rules, including paying providers based on attendance rather than enrollment and requiring payment after care is delivered instead of in advance. HHS Deputy Secretary Jim O'Neill put it directly, as AP News reported: "Paying providers upfront based on paper enrollment instead of actual attendance invites abuse."
The administration said child care funding is on hold for all states until they provide more verification, with Minnesota facing additional scrutiny for centers suspected of fraud.
Minnesota Gov. Tim Walz accused the administration of politicizing the issue, saying, "Even as we make progress in the fight against the fraudsters, we now see an organized group of political actors seeking to take advantage of a crisis." He announced the same day that he was ending his reelection campaign.
Walz's framing asks voters to believe that the real problem is not the $67 million in suspect payments, not the doubled billing with flat enrollment, not the investigator who says he was told to delete evidence, but the people asking questions about all of it. That argument has a short shelf life when federal agents are executing search warrants across your state.
Phil Krinkie, a former state lawmaker and member of the Taxpayer League of Minnesota, captured the public mood in an interview with KSTP. The frustration, he said, crosses party lines.
"I think voters are very frustrated with the entire situation. I don't think it's Republican or Democrat, they're just frustrated."
Krinkie is right that the frustration is bipartisan. But the failures are not evenly distributed. It was Republican lawmakers at both the state and federal level who pushed for tighter oversight and structural reform. And it was Democrats in the Minnesota legislature who blocked the bill that would have applied exactly that scrutiny to providers like the nine now under investigation.
KSTP noted that since no charges have been filed, it remains unclear how much of the $67 million may ultimately be tied to fraud. That's a fair caveat. Investigations take time. But the payment data, doubling in two years with no enrollment growth, doesn't need a conviction to raise serious questions about how Minnesota manages billions in public childcare dollars.
The state's track record offers little comfort. The Feeding Our Future scandal showed what happens when oversight is weak and the political class is slow to act. The pattern of Democrats blocking accountability measures in adjacent policy fights only reinforces the concern that institutional resistance to oversight is a feature, not a bug, in certain corners of state government.
The 22 search warrants are a starting point, not an endpoint. The full list of raided facilities has not been released. No charges have been filed. The federal investigation is ongoing, and the state agency at the center of the payment pipeline, DCYF, has yet to answer basic questions from the press or the public.
Rep. Kristin Robbins and the House Fraud Prevention Committee now have the records DCYF tried to withhold from reporters. What those records reveal in full, and whether the legislature has the will to act on them, will determine whether this becomes another chapter in Minnesota's growing fraud saga or the moment the state finally gets serious about protecting taxpayer money.
When payments double and enrollment doesn't, someone is getting rich. The only question is whether anyone in St. Paul cares enough to find out who.