MUST WATCH: Surveillance Footage Reveals Somali Daycare Fraud Playbook — Scheme Dates Back to 2013!

Newly resurfaced surveillance footage and investigative reporting confirm that the now-exploding Somali daycare fraud scandal in Minnesota follows a well-documented playbook that state officials were warned about as early as 2013, and repeatedly thereafter.

Yet year after year, the fraud was allowed to metastasize, draining hundreds of millions of taxpayer dollars from programs meant to help poor children, while far-left Governor Tim Walz, Attorney General Keith Ellison, and radical Rep. Ilhan Omar looked the other way.

The scandal exploded into the national spotlight this week after a viral video by YouTuber Nick Shirley went mega-viral, accusing Somali-owned daycare centers of blatant fraud.

Shirley knocked on doors, demanding answers, and what he uncovered has prompted the FBI and Department of Homeland Security to “surge” into Minnesota for a massive investigation.

Let’s rewind to 2013, when a team of Ramsey County forensic auditors uncovered the scam’s early roots. A KSTP 5 Eyewitness News report from October 2025 reveals a whistleblower from Ramsey County who, in 2013, uncovered four daycare centers exploiting CCAP, with dozens more suspicious cases totaling over $100 million in fraud.

The whistleblower alerted the Department of Human Services (DHS) and lawmakers, but nothing happened for years.

Reporter:
Did you raise your concerns to the Department of Human Services?

Whistleblower:
Yes. I spoke with the Office of Inspector General numerous times.

Reporter:
I talked with this whistleblower, whose identity we’re protecting because they still work as an auditor. They were hired as a Ramsey County forensic auditor to investigate fraud in the CCAP program.

Whistleblower:
We were the ones who came up with the $100 million a year in CCAP fraud in 2013.

Reporter:
The team of investigators uncovered four daycare centers exploiting the CCAP program. All of the owners were charged with fraud in the CCAP program, and the whistleblower says there were dozens more.

Whistleblower:
How much fraud is there? We identified 60-some-odd suspicious cases, and other cases as well.

Reporter:
But the whistleblower says nothing ever happened with those 60 other cases.

Whistleblower:
Personally, I want to know why. I think this is a much bigger issue than just a handful of bad actors. This runs deep, and it runs all the way to the top of some departments and agencies.

Reporter:
So if you and your investigation found 60 cases in the CCAP program that were questionable, they could total over $100 million?

Whistleblower:
Yes, easily.

Reporter:
And when all of this was given to state lawmakers—you alerted them to this problem 12 years ago—what is your response and your reaction to what’s going on now?

Whistleblower:
I have been in shock that nothing has happened except for the last couple of years. There are so many agencies that should have oversight of this.

Reporter:
Despite charges in those older cases, prosecutors have not announced charges in the newer investigations.

WATCH:



FOX 9’s investigative reporting in 2018 also exposed the fraud, estimating that it cost taxpayers up to $100 million a year, with cash-stuffed suitcases reportedly flying out of Minneapolis-St. Paul International Airport (MSP) almost weekly.

In 2018, Fox 9 aired a bombshell investigation detailing what the reporter described as rampant fraud in Minnesota’s Child Care Assistance Program (CCAP).

According to Fox 9’s reporting, based on public records and nearly a dozen government sources, large sums of taxpayer money were being siphoned out of daycare centers and physically carried overseas in suitcases filled with cash.

The trail led straight through Minneapolis–St. Paul International Airport, where sources told Fox 9 that carry-on bags stuffed with cash, sometimes $1 million at a time, had become a routine sight.

By 2016, investigators documented $84 million leaving MSP as undeclared carry-on cash. By the following year, that figure ballooned to more than $100 million annually, much of it headed to Dubai, the Middle East, and East Africa.

Former FBI Joint Terrorism Task Force investigator Glen Kerns told Fox 9 that some of the cash streams were routed through hawalas – informal money-transfer networks- linked to regions controlled by al Shabaab, an internationally recognized terrorist organization.

The news outlet reported:

“To better understand the connection between daycare fraud and the surge in carry-on cash, you have to look at the history of this crime.

Five years ago the Fox 9 Investigators were first to report that daycare fraud was on the rise in Minnesota, exposing how some businesses were gaming the system to steal millions in government subsidies meant to help low-income families with their childcare expenses.

“It’s a great way to make some money,” Hennepin County Attorney Mike Freeman said.

In order for the scheme to work, the daycare centers need to sign up low income families that qualify for child care assistance funding.

Surveillance videos from a case prosecuted by Hennepin County show parents checking their kids into a center, only to leave with them a few minutes later. Sometimes, no children would show up.

Either way, the center would bill the state for a full day of childcare.”

The surveillance video is timestamped March 31, 2015.

One of the most shocking cases involved Fozia Ali, who was sworn in as a member of the Hopkins Park Board while under active investigation for wire fraud and theft of public money.

As Ali pledged to “support the Constitution of the United States,” state and federal agents had already raided her Minneapolis daycare for allegedly billing more than $1 million in bogus childcare services.

The FBI confirmed that some of the stolen money went overseas. Ali herself took a two-month trip to Dubai and Kenya, staying in luxury hotels costing up to $800 per night, all while using a phone app to bill Minnesota for childcare services she wasn’t providing.

According to the indictment and documents filed in state court:

ALI operated the Salama Child Care Center (Salama) in Minneapolis. Between at least December 2013 and May 2015, ALI defrauded the Child Care Assistance Program (CCAP) to obtain payments from the Minnesota Department of Human Services (DHS) for child care services that were not actually provided.

According to the indictment, ALI submitted claims for CCAP payments that overstated the number of children who actually attended and received day care services from Salama. The claims asserted that more than 100 children attended and received child care at Salama on a given day. On more than one occasion, the claims falsely inflated the number of children that had attended Salama on a given day by more than 400 percent, including on days when Salama was closed.

Ali later pleaded guilty and was sentenced to federal prison.

Perhaps most damning are the internal warnings.

Scott Stillman, a veteran digital forensics manager at Minnesota’s Department of Human Services, sent urgent emails in 2017 warning superiors that:

“We are working on and overwhelmed by a significant amount of fraud cases involving organized crime, defrauding hundreds of millions of dollars annually in taxpayer monies.”

Stillman explicitly warned that stolen funds were being sent overseas to organizations connected to terrorism.

His emails were delayed, redacted, buried, and never meaningfully acted upon.

Stillman ultimately resigned.

WATCH:

In September 2018, the Human Services Reform Finance and Policy Committee received an update on ongoing fraud investigations being conducted by the Bureau of Criminal Apprehension and the Office of Inspector General.

The committee also heard testimony from Anoka County officials regarding their “success” in handling fraud cases.

You can watch the hour-long hearing here.

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