Federal law enforcement raid businesses in Minnesota fraud investigation

By Andy Rose, Hannah Rabinowitz, Rob Kuznia, Taylor Romine, CNN

Minneapolis (CNN) — A long-running investigation of fraud involving federal funding in Minnesota entered a new, highly visible phase Tuesday morning as uniformed law enforcement agents executed search warrants in the Minneapolis area.

Twenty-two federal search warrants were executed in Minnesota, including raids at daycares, businesses and homes, a federal official told CNN.

The raids dealt with allegations of fraud, the Department of Homeland Security said. The operation involved the FBI, other federal agencies and state and local law enforcement, a Justice Department spokesperson said.

Five sites related to four businesses served with warrants are connected to a state program designed to assist children with autism spectrum disorder, and the state’s Medicaid fraud control unit assisted in the operation for those businesses, the Minnesota attorney general’s office told CNN. The office didn’t participate in the execution of other search warrants as “those sites do not involve Medicaid funding,” it said in a news release.

Tuesday’s raids come amid longstanding allegations that some Minnesota businesses, including those run by people of Somali descent, have fraudulently used federal funding – accusations that have been the subject of a federal investigation and a fiery congressional hearing last month. Gov. Tim Walz dropped his reelection campaign in response to the scandal.

The allegations of fraud were cited by the Trump administration as the jusification for sending thousands of immigration agents into Minneapolis, St. Paul and Minnesota at large earlier this year, which in turn spurred protests from residents in the Twin Cities. The deaths of US citizens Renee Good and Alex Pretti intensified criticism against the administration’s immigration enforcement and eventually led to the Department of Homeland Security decreasing the amount of agents in the region.

Tuesday’s raids were not connected to immigration, the federal official who spoke to CNN said, but Homeland Security Investigations posted on social media that it was part of the operation. HSI is a unit within Immigration and Customs Enforcement.

Local media footage did not show anyone in custody Tuesday morning, and federal agencies did not immediately announce any arrests.

The FBI’s Minneapolis office said on social media it “conducted court-authorized law enforcement activity as part of an ongoing federal criminal investigation” with the assistance of other federal, state and local law enforcement.

Minnesota’s Bureau of Criminal Apprehension also confirmed its involvement, telling CNN its agents “partnered with federal law enforcement to execute multiple warrants across the Twin Cities Metro Area.”

“We remain committed to identifying criminal activity and holding those responsible accountable,” the agency said.

Two law enforcement agents and an FBI evidence photographer were shown on KARE video Tuesday removing a box and plastic evidence bags from the former location of Quality Learning Center, the child care business at the center of a December video by conservative content creator Nick Shirley accusing Somali businesses in the Twin Cities of wide-scale fraud.

A representative of Quality Learning Center told KARE shortly after Shirley’s video came out that it was not engaged in any fraud.

The business closed in January, according to records from the state Department of Human Services, and its infamously misspelled sign was no longer above the entrance Tuesday.

At 7 a.m. Tuesday, about a dozen agents rolled up near Medina Mall in south Minneapolis, where the daycare Metro Learning Center is located, said mall owner Mahamed Cali.

The raid began as many of his 30 or so tenants were opening up shop, Cali said. It took them by surprise, and some wrongly thought the agents were from ICE, causing some of them to run, he said.

Cali declined to say whether he has seen children going into the childcare center, noting that he doesn’t want to give the impression that he is either defending or implicating the business. But he said the daycare – which has been in the mall for eight years – has been a good tenant. “Every person is innocent until proven guilty,” he said.

FBI agents were also seen Tuesday by a KARE reporter entering the Somali Senior Center, which is licensed to provide adult day care services. A person who answered the phone at the business Tuesday morning told a CNN reporter to “call later” and hung up. CNN also went to the center and asked a person leaving if they wanted to comment, but they declined.

Outside the Mako Childcare Center – also known as Mini Childcare Center – in Minneapolis, agents in FBI tactical vests silently loaded computer monitors and other evidence into vehicles parked in front of the building Tuesday, a CNN reporter observed.

Days after Shirley’s video brought new scrutiny to fraud allegations in the Somali community, state regulators checked the businesses he highlighted and said in a statement they were found to be “operating as expected.”

But the state Department of Children, Youth, and Families praised Tuesday’s raid and claimed some of the credit for it.

“We are pleased to see the state’s Bureau of Criminal Apprehension and our federal partners taking strong action based on information we have shared with them,” the department said in a statement. “We will continue sharing information with law enforcement to ensure they are able to conduct thorough criminal investigations.”

“We catch criminals when state and federal agencies share information. Joint investigations work, and securing justice depends on it,” Walz added Tuesday.

DHS Secretary Markwayne Mullin and FBI Director Kash Patel both criticized Walz on X Tuesday, saying it was solely because of the Trump administration that fraud was being investigated.

“You have *zero* credibility on this issue,” Mullin said in an X post responding to the governor. “@GovTimWalz , you have willingly ignored and downplayed the rampant fraud and abuse in Minnesota.”

The fraud allegations put intense pressure on Walz, the former Democratic vice presidential nominee who was running for a third term as governor. Although he denied allegations by Republicans that his administration ignored financial abuse, Walz announced in January he was dropping his reelection campaign.

“Every minute that I spend defending my own political interests would be a minute I can’t spend defending the people of Minnesota against the criminals who prey on our generosity and the cynics who want to prey on our differences,” Walz said in a January news conference.

The Minnesota House Fraud Prevention and State Agency Oversight Policy Committee also happened to have a hearing Tuesday on the state’s childcare assistance programs. The committee had invited Walz to speak back in March, offering multiple dates for a hearing, but he declined Monday night, Committee Chair Rep. Kristin Robbins, a Republican, said.

During the hearing, Tikki Brown, the commissioner for the Minnesota Department of Children, Youth, and Families, shared the committee’s “zero tolerance for fraud,” but also said that “the events over the past several months have caused anxiety and fear for many providers.”

“The vast number of providers do their very best, they’re following the rules, and to suggest otherwise is harmful to providers and thus our families and our communities,” she said.

The Twin Cities’ most significant federal fraud investigation focused on Feeding Our Future, a nonprofit accused of stealing hundreds of millions of dollars in federal funding.

Sixty-five people – the vast majority of whom are of Somali descent – have been convicted in the Feeding Our Future probe, which began in 2022. The person federal authorities said was the “mastermind” of the fraud scheme, Aimee Bock, is White.

Bock was convicted on seven federal charges. She has not yet been sentenced, but a judge denied her request for a new trial.

Several federal prosecutors who had worked on the Feeding Our Future cases resigned earlier this year in the wake of the death of Good.

Those attorneys – including Joseph Thompson, the chief fraud investigator for the US attorney’s office in Minnesota who had briefly served as top federal prosecutor in the state – quit after being asked by the Trump administration to investigate Good and her family rather than the ICE officer who shot her, a source familiar with the matter told CNN in January.

President Donald Trump has frequently used harsh xenophobic language against Somalis in Minnesota, including Rep. Ilhan Omar, who immigrated to the US as a child refugee from Somalia. In a December cabinet meeting, Trump called Omar “garbage.”

“Their country is no good for a reason,” he said. “Their country stinks, and we don’t want them in our country.”

Cali, the mall owner, said Tuesday his tenants have been hit hard by Trump’s fixation on the Somali community in Minneapolis.

“When an individual does something wrong, they should be punished but not the whole community,” he said. “Somali people should not be singled out.”

This story was updated with additional information.

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CNN’s Cheri Mossburg, Rebekah Riess, Ray Sanchez, Evan Perez, Jeff Zeleny and Holmes Lybrand contributed to this report.