Minnesota Freeze: HHS Locks All Funding over Fraud; DHS ‘Massive Operation’ Launched

We often hear presidents and governors promise a “whole of government” response to crises, scandals, and a combination of the two. Rarely do we see it.

Until now, that is. With the stunning scope of fraud emerging from federally funded programs in Minnesota, the Trump administration has a chance to make an example of corruption and graft in the deep-blue state. Three separate Cabinet departments have announced massive responses intended to do exactly that.

First off, the Department of Health and Human Services announced late yesterday that they have frozen all funds for child-care programs in Minnesota. CNN reported it in the context of hostility toward Somali immigrants, but the centers that serve that community are at the heart of the fraud already established in criminal trials:

The US Department of Health and Human Services says it has frozen all child care payments to the state of Minnesota, as the FBI and Department of Homeland Security investigate allegations of fraud, including at child care centers, in the latest show of federal force in the state — home to the country’s largest Somali population.

Deputy Secretary of HHS Jim O’Neill announced the funding freeze on X Tuesday, weeks after ICE launched operations in the Minneapolis-St. Paul area to specifically target undocumented Somali immigrants, precipitated by revelations about widespread fraud against the state as well as President Donald Trump’s comments that he “doesn’t want” Somalis in the country. …

In addition to demanding a state audit of the Minnesota day care centers featured in the video, O’Neill said the agency would now require justification and receipts or photo evidence for all payments to states from the department’s Administration of Children and Families.

“Funds will be released only when states prove they are being spent legitimately,” O’Neill said.

Er … shouldn’t HHS have always had this policy? That might have prevented the scams emerging in Minnesota, and now apparently getting exposed in other states as well. Maybe it would make sense to just freeze this program on a national basis until these programs have proper safeguards against fraudulent use of taxpayer funds. It might save us a billion or two, and we all know that a billion here and a billion there eventually adds up to real money. 

While HHS freezes the funds, Homeland Security has launched what they call a “massive operation” to deal with the fraud. Using immigration and asylum laws, DHS has fanned out across Minnesota to track down anyone and everyone involved fraud in this program and others:

Federal authorities are launching a “massive operation” in Minnesota on Tuesday to “identify, arrest, and remove criminals who are defrauding the American people,” the Department of Homeland Security said. 

“Our investigative agents are conducting a massive operation to identify, arrest, and remove criminals who are defrauding the American people. We will root out this rampant fraud plaguing Minnesota,” the agency wrote on X. …

The DHS announcement came a day after the department said it had launched an operation to investigate fraud in the city of Minneapolis after the release of a video by an independent journalist that questioned daycare center operators in the area. 

And at the same time, the Department of Justice has vastly expanded its own resources in Minnesota to deal with other criminal violations related to the organized fraud rings operating under Tim Walz’ nose:

The FBI went into overdrive to investigate suspected fraud at nearly a dozen Minnesota social services after a YouTube video purporting to show day care facilities that aren’t operational but receiving state and federal funding went viral over the weekend.

FBI Director Kash Patel posted on X that he was aware of the video, created by right-wing influencer Nick Shirley, but insisted the FBI had already “surged” investigative resources and personnel to Minnesota as part of its ongoing fraud investigation that has largely targeted Somali immigrants.

“The FBI believes this is just the tip of a very large iceberg,” Patel posted Sunday on X.

Yeah, well, who doesn’t believe that now? 

Walz doesn’t, but he’s part of a dwindling minority. Karoline Leavitt told Fox & Friends this morning that Walz is “totally incompetent,” and that the administration will clean up Minnesota despite Walz:

“Governor Walz is completely incompetent. He always has been.”@PressSec Karoline Leavitt sounds off as federal authorities investigate Minnesota’s fraud scandal. pic.twitter.com/xxSaK5nqYC

— FOX & Friends (@foxandfriends) December 31, 2025

We’ll see how much they can do, but it’s clear now that Trump and his team are serious about exposing and punishing the organized fraud rings and all those who have enabled the corruption. David asked in our previous post whether we’d truly see a “full court press” to hold everyone accountable. We are certainly looking at something close to that now, at least as a start. 

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