Elon Musk Highlights Alleged 'Ghost Daycare' Fraud in Minnesota Taxpayer-Funded Programs

 


 Elon Musk's X Post Analysis

Elon Musk's post from December 26, 2025, quotes a video by independent journalist Nick Shirley (
@nickshirleyy
), highlighting alleged fraud in taxpayer-funded daycares in Minnesota, many owned by members of the Somali community. Musk's caption reads: "One taxpayer funded daycare after another where there are literally zero kids, not even a few kids just for show!"
The quoted video shows Shirley visiting several facilities, attempting to enroll a child, and finding no children present despite claims of serving dozens. One center ("Quality Learing Center" – note the misspelling) reportedly received around $1.9–4 million in funds via Minnesota's Child Care Assistance Program (CCAP) while appearing inactive, with state records showing violations like missing child records.Broader Context: Minnesota Fraud ScandalsThis post ties into ongoing federal investigations into massive fraud in Minnesota's social services programs, primarily affecting federal funds administered by the state:
  • Feeding Our Future Scandal: The largest COVID-era fraud case in the U.S., involving $250–300 million stolen from child nutrition programs. Dozens (mostly Somali-American defendants) were convicted for fake meal claims, with funds used for luxury purchases and overseas transfers. As of late 2025, over 78 defendants charged, with convictions ongoing.
  • Expansion to Other Programs: Prosecutors now probe 14 programs (including childcare, autism therapy, housing stabilization, and Medicaid services), estimating total fraud could exceed $1 billion – potentially half of $18 billion in federal funds. Many schemes involve overbilling for non-existent services, often linked to Somali diaspora networks.
  • Daycare-Specific Allegations: Reports highlight "ghost daycares" billing for children who aren't there. Shirley's video claims to document over $110 million in suspicious payments in one day of visits. Centers have accumulated violations (e.g., no child records, unsafe conditions) yet continued receiving funds.
Sources across the spectrum (NYT, Fox News, Star Tribune, DOJ announcements) confirm convictions and scale, though some note oversight failures by state agencies under Gov. Tim Walz rather than direct complicity. Claims of funds reaching terror groups (e.g., Al-Shabaab) lack evidence per federal investigators.Political Reactions
  • Musk amplified the video, sparking calls to cut funding and prosecute officials.
  • President Trump labeled Minnesota a "fraudulent money laundering hub," terminating Temporary Protected Status for Somalis and criticizing immigration policies.
  • Republicans (e.g., Rep. Tom Emmer, House Oversight Committee) demand answers from Walz.
  • Somali community leaders and some reports highlight risks of stereotyping, noting fraud involves specific individuals, not the entire community.
Investigations continue, with Treasury involvement and potential for billions in losses. This reflects systemic oversight issues in rapidly expanded pandemic-era programs, substantiated by hundreds of charges and convictions.

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