Lawmakers on Wednesday heard testimony from an investigator, a watchdog and a frontline provider who said government inaction, political pressure and weak oversight allowed large-scale fraud to flourish in Minnesota, while legitimate programs were left on the brink of collapse.
The House Judiciary Subcommittee on Crime and Federal Government Surveillance held the hearing, with Rep. Andy Biggs, R-Ariz., leading the discussion.
Among the witnesses were YouTuber Nick Shirley, retired Minnesota fraud investigator Scott Dexter, and Minnesota autism provider Jennifer Larson — each offering different perspectives but echoing the same concern about fraud in the state.
Nick Shirley says viral video sparked federal action
Nick Shirley, whose investigative videos on Minnesota fraud have received hundreds of millions of views, told the committee his reporting helped expose the problem on the national stage.
“It created instant change within our government,” stated Shirley, who said he, along with his investigative partner David, visited several childcare centers that appeared inactive despite receiving millions.
“We arrived, and it was an industrial building … the windows were blacked out,” he said. “There’s playgrounds … no children.”
He said some centers received massive funding despite obvious red flags.
“One center received $1.9 million, yet they couldn’t even spell ‘learning’ correctly on their sign,” Shirley testified. “You don’t even have to be smart to see these red flags.”
Shirley said Gov. Tim Walz has said he’s been fighting fraud in Minnesota since 2019 and that the buck stops with him.
“While people like Gov. Tim Waltz call people like me a white supremacist, delusional conspiracy theorist, he actually decided to drop out of reelection because, I believe, of how deep and extensive this fraud is,” Shirley said.
“We the people have had enough of our hard earned money going towards fraudsters, as if it’s no big deal.”
🚨 BREAKING: Nick Shirley just sent a shiver down the spine of EVERY Democrat fraudster in America, particularly Califronia
"You don't even have to be smart to see these red flags!"
He's dropping TRUTH NUKES in front of Congress, saying the fraud is in the TENS of billions!… pic.twitter.com/oiPIVG5lAT
— Eric Daugherty (@EricLDaugh) January 21, 2026
Former DHS investigator: Fraud ignored, investigations slowed
Scott Dexter, a former Minnesota Department of Human Services investigator, testified that he spent nearly three decades conducting criminal and financial fraud investigations, including in the state’s Child Care Assistance Program before political pressure and bureaucratic hurdles brought meaningful investigations to a halt.
After joining DHS in 2013 as part of a newly formed fraud unit, Dexter said his team focused on data-driven cases — not race, religion or geography.
“Our cases were not selected based on the name of the center, the owner, or the community it served,” Dexter told lawmakers. “They were selected based solely on tips, complaints, and the amount of CCAP funding being paid out.”
Dexter said that what investigators found raised red flags.
“Many of these centers operated out of commercial spaces with windows totally covered, no visible play areas, and very few children ever present,” Dexter said.
He said investigators documented “patterns of overbilling, nonexistent attendance, and in some cases, children being signed in for hours they were never actually at the center.”
Despite mounting evidence, Dexter said oversight tightened — not on fraudsters, but on investigators.
“We were labeled as racially biased,” he testified. “Following that review, new restrictions were placed on our work.”
Eventually, Dexter said, investigations became nearly impossible.
“In 2019, I chose to retire because the investigative process had become so constrained that meaningful work was no longer possible.”
Millions in cash, political sensitivity blocked cases
Dexter told lawmakers federal agencies later uncovered millions in cash being moved out of the country from the Minneapolis-St.Paul International Airport.
“Nearly $70 million had been documented leaving the country halfway through a single year,” he said.
While investigators could not definitively prove the money was fraudulent, Dexter said law enforcement believed it was tied to abuse of public programs.
He also testified that political concerns stopped some cases from moving forward.
“We encountered situations where federal partners were prevented from opening cases due to concerns about political sensitivities surrounding the Somali community,” Dexter said.
He warned that loopholes in the system remain wide open.
“Centers were allowed to bill for full authorized hours even when children were present for minutes,” he said. “Attendance records were handwritten, unreliable, and often incomplete.”
Autism provider warns families are paying the price
Jennifer Larson, founder and CEO of Holland Center in Minnesota, said legitimate providers are now suffering because of the state’s response to fraud.
“We serve the children that don’t succeed in public school settings,” Larson said. “This work is a labor of love for me.”
She said her organization — which has operated for more than 20 years — is now at risk after Medicaid payments were frozen.
“Within the last month, the state has withheld over $400,000 in Medicaid funds for my own program,” Larson said.
She warned the consequences are immediate and severe.
“When we can’t pay our staff, we lose our staff, and children lose care,” she said. “Families do not lose appointments — they lose the people they trust.”
Larson said fraud should be prosecuted, but not at the expense of children with disabilities.
“The simple solution to the problem: send the criminals to jail and allow trusted providers … to continue providing prescribed, ethical therapy,” she said.
Despite different perspectives, witnesses agreed on one thing: fraud must be addressed without destroying legitimate services.
“What happened in Minnesota had nothing to do with the ethical, longstanding autism providers. What did happen was organized criminal networks that exploited autism services by opening fake centers, billing for children that did not exist, billing for services never delivered, and stealing millions of taxpayer dollars in the process,” Larson testified.
“Instead of doing the obvious thing and targeting criminal actors, the response has been to freeze everyone’s payments. That decision does not punish the criminals. It punishes innocent children and families.”
Jenna Gloeb
Jenna Gloeb is an Edward R. Murrow Award-winning journalist, media producer, public speaker, and screenwriter. Most recently, she worked as a reporter and on-air host for CCX Media. Jenna is a Minnesota native and resides in the Twin Cities with her husband, son, daughter, and two dogs.
