Explore Fraud News Impacting Childcare
Uncover the latest stories on Minnesota childcare fraud and their impact with Quality Learing Center.
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Summary of the Minnesota Daycare Fraud
The Minnesota daycare fraud scandal, brought to light by 23-year-old independent journalist Nick Shirley, has unveiled a multimillion-dollar scheme centered in Minneapolis, where allegedly fake childcare centers, including the notorious "Quality Learning Center," have misused state and federal childcare subsidies to the tune of over $110 million in potential fraudulent claims across multiple sites. Shirley’s 42-minute video, released on December 26, 2025, documented an empty Quality Learning Center—licensed for 99 kids—during business hours, exposing glaring oversight failures despite 95 violations and $4 million in subsidies since 2019, with $1.9 million disbursed in 2025 alone. This scandal, amplifying national attention, has implicated government inefficiencies and sparked calls for prosecution from high-profile figures like Elon Musk and FBI Director Kash Patel, who has surged agents to Minnesota amid ongoing raids on related businesses.
Fraudulent Funds Discovered
On December 26, 2025, Shirley released a 42-minute video documenting his investigation into licensed childcare centers approved for dozens of children, such as the Quality Learning Center, which is licensed for 99 kids. During a visit, he found the facility empty during business hours, with no staff, children, or cars in the lot, despite its active license.
Financial Discrepancies
Minnesota Department of Human Services (DHS) records reveal the Quality Learning Center received approximately $4 million in subsidies since 2019. In fiscal year 2025 alone, it reportedly received $1.9 million from the Child Care Assistance Program (CCAP), despite 95 violations and 13 inspections since May 2022, including failures to keep hazardous items away from children and missing records for 16 listed children.
Scale of Fraud:
Shirley’s team flagged over $110 million in potential fraud across multiple sites in a single day of investigation, suggesting a widespread network. This figure aligns with federal estimates of up to $8 billion in "industrial-scale" fraud across Minnesota’s high-risk programs since 2018, as reported by the U.S. Labor Department.
Misspellings and Red Flags
The "Quality Learing Center" sign (misspelling "Learning") has become a symbol of the fraud’s audacity. Attempts to contact the center via its listed phone number (612-702-4012) failed, with Fox News confirming it doesn’t work, further raising suspicions.
Historical Context
This scandal builds on previous Minnesota fraud cases, such as the $250 million Feeding Our Future scheme, where 59 individuals have been convicted, and a broader $1 billion investigation into Somali community-linked nonprofits, including those claiming to aid hungry children and autistic individuals.
News
Government and Public Response
FBI Director Kash Patel has surged agents to Minnesota, with recent raids on Somali “healthcare” businesses. The U.S. Labor Department deployed a strike team in December 2025 to probe fraud across benefit programs, and the Trump administration suspended $5.5 million annually in Small Business Administration funding to the state.
Political Pressure
GOP Majority Whip Tom Emmer and others have demanded answers from Governor Tim Walz, with Elon Musk posting on X, “Prosecute @GovTimWalz. He knew.” Critics, including President Donald Trump, have labeled Minnesota a “hub of fraudulent money laundering activity,” citing its Somali community.
Public Reaction
X users have flooded the platform with memes, notably Elon Musk’s Zoolander reference, alongside serious calls for accountability. Sentiment ranges from humor to outrage, with some estimating losses exceed Minnesota’s annual Department of Corrections budget ($1 billion).
Implications
Systemic Issues: The fraud highlights weaknesses in DHS oversight, with licenses remaining active despite repeated violations. Whistleblowers, including a former Ramsey County auditor, report decades of similar schemes dating back to 2013.
Economic Impact: Taxpayers face significant losses, with federal prosecutors investigating over $9 billion in potential fraud. This has fueled partisan debates, with some linking it to immigrant voting blocs.
Ongoing Investigation: Authorities describe this as “the tip of the iceberg,” with raids and probes ongoing. Shirley’s work has prompted calls for legislative reform and stricter auditing.
Disclaimer
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