Weather 
The Department of Health and Human Services is freezing $10 billion in federal funds in five Democrat-run states over allegations of fraudulent child-care programming, an HHS official confirmed to News.
The HHS official confirmed that the five states are California, Colorado, Illinois, Minnesota and New York.
The funding freeze will severely hamstring families in these states during the new year and could have long-term implications, particularly for low-income families, amid an ongoing affordability crisis, according to economic data.
“For too long, Democrat-led states and Governors have been complicit in allowing massive amounts of fraud to occur under their watch,” a health department spokesperson wrote in a statement to News, adding that the administration is “ensuring that federal taxpayer dollars are being used for legitimate purposes.”
A senior Trump administration official said the child-care programs were frozen because of “rampant fraud” and “giving money to illegals.” The department has not cited evidence of fraud in all of the states impacted after alleged fraud in child-care centers in Minnesota.
The official listed instances of alleged child-care fraud in New York, Illinois and California, however, News could not independently confirm any examples of programs fraudulently sending money to undocumented immigrants.
The federal actions came after an unverified online video from conservative influencer Nick Shirley alleging fraud in child-care services in Somali communities in Minneapolis. Minnesota officials had disputed the allegations.
Minnesota has been under scrutiny in recent weeks over yearslong investigations and controversies about alleged fraud in child-care centers.
According to federal charges filed over the past couple of years, at least 70 people were part of a wide-ranging criminal conspiracy that exploited two federally funded nutrition programs to fraudulently obtain more than $250 million in one of the largest COVID-era fraud schemes anywhere in the nation.
The defendants allegedly used a Minnesota-based nonprofit organization called Feeding Our Future to avoid tough scrutiny from the Minnesota Department of Education, which was supposed to be conducting oversight of the programs.
Last week, the Trump administration paused Child Care and Development Fund payments — the primary federal source for child-care assistance — to all states, according to Andrew Nixon, a spokesperson for HHS. While the connection between the new five-state freeze and earlier actions remains unclear, an HHS official confirmed on Tuesday that the action builds on an existing Minnesota funding halt.
News has reached out to HHS for additional details about the funding freeze impacting child-care centers in the five states.
Minnesota Gov. Tim Walz announced Monday that he would drop his bid for reelection as governor to focus his attention on defending Minnesota against the allegations of fraud.
President Donald Trump said in a social media post on Tuesday that the “Fraud Investigation of California has begun,” without providing specifics about what exactly is being investigated or what the alleged fraud is. Trump said in the post that California, under its Democratic Gov. Gavin Newsom, “is more corrupt than Minnesota.”
Newsom responded to Trump in a social media post on Tuesday, calling the president a “deranged, habitual liar whose relationship with reality ended years ago.”
New York Gov. Kathy Hochul, a Democrat, called the funding cuts an “impending threat” to her state and accused the Trump administration of carrying out a “frontal assault” on children.
“Why is there such a frontal assault on children in this nation from this administration?” Hochul said during a news conference in New York City Tuesday. “Now, they don’t give a damn about child care for kids.”
New York has not received formal notification that funding is being withheld from the state. If it comes, Hochul pledged to fight in court.
“We will fight this with every fiber of our being because our kids should not be political paws in a fight that Donald Trump seems to have with blue state governors,” Hochul said.
A spokesperson from the Illinois Department of Human Services said it has not been contacted by the administration regarding the news about a child-care funding freeze in the state.
Colorado and its Department of Human Services have not been notified of any changes to funding sources, a spokesperson for the governor’s office told News.
“Beyond reports in the media, the state has not been officially notified of any changes to these funding sources,” the spokesperson said in a statement. “These resources support families in need and help them access food and much more. If true, it would be awful to see the federal government targeting the most needy families and children this way.”
News’ Laura Romero and Sabina Ghebremedhin contributed to this report.
© 2026 News Internet Ventures.
