CRABBY: Former DHS investigator Says Walz Administration Shut Down Fraud Investigation Unit.

Summary

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Garage Logic – CRABBY: Former DHS Investigator Says Walz Administration Shut Down Fraud Investigation Unit

Gamut Podcast Network | April 29, 2026

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Episode Overview

This episode dives deep into Minnesota’s ongoing childcare fraud scandal, focusing especially on explosive testimony from a former DHS investigator, Jay Swanson, at a state legislative hearing. The discussion unpacks how the Walz administration allegedly shut down Minnesota’s fraud investigation unit in 2019—contributing to ongoing, multi-million-dollar scams within the Child Care Assistance Program (CCAP). Hosts Jay Coles and Kenny examine systemic oversight failures, the culture of whistleblower suppression, and the political response as federal agents unearth decades of fraud. The episode also teases upcoming stories related to other political figures.

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Key Discussion Points & Insights

1. Fraud Continues Despite Past Scandals ([02:12] – [05:19])

• Massive Ongoing Fraud: Despite prior high-profile cases and convictions, “the real criminals are walking around unscathed with no real worries...they’re still working there at the Minnesota Department of Human Services...the same folks trying to cover up the fraud about six years ago.” — Kenny [02:12]
• Federal vs. State Action: Federal authorities, not state agencies, led a major enforcement sweep with 22 warrants against daycare and autism centers, as state oversight continued to falter.

2. The CCAP Fraud Story – How it Unfolded ([05:19] – [19:18])

• Investigative Journalism: Coles outlines a months-long investigation beginning August 2024, prompted by tips from Capitol sources that fraud at CCAP centers remained unchecked years after an auditor’s report.
  • Allegations included daycares with “no children. You can go by there morning, noon, and night. There’s no kids, no adults...” — Jay Coles [06:01]
• Dramatic Site Visits: Over three months, the team visited suspected centers repeatedly and found no sign of legitimate businesses or children, yet millions continued to flow to these entities.
• Limits of State Law: DHS claimed they could only cut payments if fraud was proven or if licenses were suspended—criteria that were rarely met in time to prevent loss.

3. The Role of Journalists and Coordination with Authorities ([10:17] – [15:36])

• Withholding Stories at Feds’ Request: Feds asked Coles to delay airing his investigation to avoid jeopardizing their work, an ethical dilemma for journalists.
  • “No story is worth screwing up a federal investigation.” — Jay Coles [10:45]
• Navigating Ethics: Coles details how media sometimes collaborate with law enforcement to accommodate sensitive investigations, then receive “first dibs” on the resulting stories.
• Subsequent Reporting Focus: Unable to use the term “fraud,” they focused initial stories on “lax oversight,” highlighting egregious safety violations and unresponsive operators ([15:36]).

4. Systemic Oversight Failure — State Agency Disconnects ([17:26] – [19:18])

• No Communication Between Agencies: Example of a daycare operator banned by DHS who then moved to another program (Feeding Our Future), netting millions before a federal conviction.
  • “You would think they would...put out an email to every other state agency...but that wasn’t happening.” — Jay Coles [17:39]

5. The “Wind Tunnel” of Cash & Persistent Fraud ([27:03])

• Ongoing Loopholes: Fraud escalation post-2019 was likened to crooks jumping back into a money wind tunnel, exploiting government inertia.
  • “Let’s get back into that wind tunnel and see if we can grab a few more hundreds. It’s pretty bad.” — Jay Coles [27:20]

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The DHS Whistleblower Testimony & Political Fallout

6. Former Investigator Jay Swanson’s Testimony (Key Segment: [30:08] – [54:07])

Headline Claims:

• Swanson (2014–2019): Manager of CCAP fraud investigations.
• Administration Orders Unit Shut Down: In early Walz administration (2019), the fraud unit is disbanded, BCA agents told to “go home,” and ongoing criminal probes are shut down.
  • “He said...in 2019 the Walz administration ordered...shut down that fraud investigative unit.” — Jay Coles [31:46]

Anecdotes & Soundbites:

• Kickback Tips from Crooks:
  • “[Weekly] we were getting tips from the fraudsters and the kickback artists saying, where’s my money?” — Jay Coles [32:49]
  • “A mother called to complain her daycare owner stopped paying her the cash kickback...Another day, a co-owner called, cheated out of his share of the fraud proceeds.” — Jay Swanson [33:48]
• Threshold for Investigation:
  • “Unless it was over a million bucks, they just didn’t have enough time.” — Jay Coles [35:11]
• Brazen Fraud Plans:
  • “Text: How much longer you gonna do the daycare scam? — Another year or two, gonna buy some nice homes in Nairobi...on public assistance...on vacation in Dubai.” — Jay Swanson [36:52]
• Why Frauds Persist: Prosecutors explain, relative to background and risk, even two to three years in prison is worth millions for some.
  • “If you could get three million bucks and you’re out in two years, you’re set for life.” — Jay Coles [41:29]

Fraud Becomes a Refugee ‘Strategy’:

• Origin Stories:
  • “They would say they’d first heard about [the scam] while in the refugee camp in Kenya...You could run the scam in several states, but it was easiest and you could make the most money in Minnesota.” — Jay Swanson [45:02]

Suppression and Retaliation:

• Supervisor Interference:
  • “The official told me to delete a number of paragraphs of the document I had sent. I then advised this official that...what they were telling me to do was illegal.” — Jay Swanson [48:05]
• Retaliation: Swanson alleges investigators were harassed, a $90,000 consultant hired to discredit their findings, BCA agents locked out of offices, and the unit disbanded.
  • “Harassed and bullied...DHS paid $90,000 to a consultant...label CCAP fraud allegations unreliable...” — Jay Swanson [51:16]
  • “BCA agents to vacate our building...in June 2019, I submitted my resignation-slash-retirement.” — Swanson [52:23]
• No Accountability: “A few of the senior level DHS officials...harassed and abused our unit...are still working at DHS today.” — Swanson [53:52]

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Highlights, Quotes & Impactful Moments

On the Absurdity and Scale of Fraud

• “You really. You did a great job and you really screwed up.” — Jay Coles [48:54]
• “There’s some fraudsters out there who...didn’t even make the bar to be investigated because they had too many in the multimillions.” — Jay Coles [35:18]

On Political Response

• “Governor Walz is now standing there and saying, ‘look at what we’re doing.’ As a reporter, it doesn’t hold much water...” — Jay Coles [57:38]

On Whistleblower Suppression

• “...members of our unit were harassed and bullied by DHS officials...advised BCA agents to vacate our building.” — Swanson [51:16]; [52:23]
• “A few of the senior level DHS officials...are still working at DHS today.” — Swanson [53:52]

On Inter-agency Failures

• “He gets kicked out of CCAP, he gets 1.8 million from CCAP. He gets kicked out, he goes over and he steals 1.2 million from Feeding Our Future...” — Jay Coles [17:39]

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Timestamps for Major Segments

| Timestamp | Segment Description | |-----------------|------------------------------------------------------------------------------------------------------| | [02:12] | Introduction to ongoing CCAP fraud and federal action | | [05:19] | Re-examination of CCAP after tipoffs in 2024, deep-dive into daycare investigations | | [10:45] | Ethics of withholding stories during federal investigations | | [15:36] | Airing of initial “lax oversight” story on KSTP (Jan 2025) | | [27:03] | Metaphor of “money machines” – how fraud persisted after 2019 | | [30:08] | Background on Swanson, the shutdown of the DHS fraud investigation unit | | [33:48] | Swanson’s committee testimony: Kickback tips, million-dollar thresholds, outlandish fraud anecdotes | | [45:02] | Fraud as a known opportunity in overseas refugee camps | | [48:05] | Swanson’s supervisor’s illegal request to suppress reporting | | [51:16] | Retaliation, harassment, and shutdown of fraud unit | | [53:52] | “Harassers” still working at DHS | | [57:38] | Critique of Walz’s handling and public statements | | [61:07] | No response from the Governor’s office on DHS firings | | [66:43] | Teaser: House Oversight Committee investigation into Ilhan Omar’s finances |

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Other Notable Segments

Oversight on Oversight ([55:10] – [61:07])

• Coles walks listeners through how to access committee hearing videos, highlighting the importance of direct evidence and first-hand context.

Upcoming Investigations and Political Teasers ([65:02])

• Hints at pending stories on Rep. Ilhan Omar, with confirmation of a House Ethics Committee probe but holding back further details pending more sources.
  • “If I can get confirmation, I will. We’ll be the first ones to put it out there. Boy, I hope I get confirmation, Kenny.” — Jay Coles [68:41]

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Memorable Quotes (with Attribution & Timestamps)

• “No story is worth screwing up a federal investigation.” — Jay Coles [10:45]
• “Unless it was over a million bucks, they just didn’t have enough time.” — Jay Coles [35:11]
• “They would say they had first heard about [the daycare scam] while in the refugee camp in Kenya…could make the most money in Minnesota.” — Jay Swanson [45:02]
• “The senior DHS official told me to delete a number of paragraphs of the document...I believed what they were telling me to do was illegal.” — Jay Swanson [48:05]
• “A few of the senior level DHS officials…are still working at DHS today.” — Jay Swanson [53:52]
• “Governor Walz…will not, under any circumstances, take blame for anything he has done wrong. He also always shifts the blame.” — Kenny [59:23]

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Conclusion & Takeaways

The episode paints a comprehensive narrative:

• State-level fraud in the CCAP program persists due to a longstanding culture of administrative inaction and active suppression of investigators.
• Political responses, especially from the Walz administration, are described as too little, too late—in some instances alleged to be actively obstructive.
• Whistleblowers face retaliation, and senior officials implicated in coverups remain in their positions.
• The scope of the fraud is so vast and well-known that even overseas refugee camps fixate on Minnesota as a target.
• Federal authorities and investigations have driven actual progress, with state mechanisms lagging far behind.

This episode serves both as exposé and a warning about Minnesota’s vulnerabilities in government program oversight—illustrating, in stark and personal terms, how systemic inertia and bureaucratic self-protection can allow massive grifts to persist in plain sight.

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Transcript

[Mishke]

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[Kenny]

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[Jay Coles]

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[Kenny]

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[Jay Coles]

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[Mark Ellis]

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[Jay Coles]

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[Kenny]

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[Jay Coles]

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[Kenny]

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[Kenny]

It really doesn't matter how many fraud convictions we get. 80, 100, 250. So far, the real criminals are walking around unscathed with no real worries that they'll ever be held accountable. That's because they're. They're still working there at the Minnesota Department of Human Services, the House, the Senate, the big seat in some cases. The same folks in the DHS that claim to be fighting to expose fraud now were the same folks trying to cover up the fraud about six years ago.

[Jay Coles]

Yeah, and beyond. And don't take our word for it, Kenny. Take it from the horse's mouth. We're going to hear from a guy who was right in the middle of it.

[Kenny]

We've got a big one. No guests here today. We did try to book Jay Swanson. He decided he doesn't want to do any public any more media.

[Jay Coles]

He just wants to do government officials and law enforcement.

[Kenny]

That's fine. And a lot of news yesterday actually. The feds came into town. They were executing search warrants yesterday morning. And like you said, Jay Swanson was in testifying yesterday, yesterday afternoon about he. How he and his team were scolded and shut down, threatened and shut down by dhs. And now we have a governor that claims that his team, his investigators and his bright shiny new laws are fighting fraud for us. So don't worry. The Minnesota government is here to help you.

[Jay Coles]

Except all those indictments have come down by the feds and not Minnesota. And the raids yesterday were the feds and well, I guess Minnesota assisted in it, but it was led by the Feds. Well, isn't it interesting though, Kenny, as those raids are happening at the daycare centers yesterday, 22 warrants, half of them daycare, some autism centers. Simultaneously, as those raids are happening, there's a former criminal investigator in the DHS fraud unit testifying on how the state buried some of this stuff and then ended their own investigations. The irony is not lost upon us on that list.

[Kenny]

Well, let's start with what led to the search warrants yesterday morning. You had more of a role than we all previously thought. Are you some kind of inside government Special Agent Jay Coles now? What, what happened there?

[Jay Coles]

So I do think the context of this is, is, is, is needed before we get into the testimony of the former criminal investigator. Kenny, first of all, the CCAP stuff did come to light during those investigative years, those four or five years that the unit was together. And the Office of legislative auditor in 2019 issued a scathing report about CCAP and all the problems with it and what needed to be done to have it fixed. Okay, so we all recall that. At least I recall because I was working for Channel 5 in the newsroom, so certainly I recall that timeframe. And they did bust probably maybe five to seven daycare operators back then and got them convicted.

[Kenny]

Remind everybody what CCAP stands for.

[Jay Coles]

Okay, I'm sorry. Childcare Assistance Program. CCAP as it's known in the world of bureaucracy. And essentially that's just, that's taxpayer funded federal money. Taxpayer funded to help families who can't afford daycare because they're low income. That's it in a nutshell. So that was 2019. So fast forward to the summer of 2024. Two sources, two contacts of mine at the Capitol get in touch with me and they say, would you be interested in a CCAP story? We've got some information for you. And I said, well I sure would. I said, but what's going on with ccap? I thought after the Office of Legislative Auditor put the hammer down, I was just assuming things were fixed. And he said that's the problem, nothing's fixed. And we think there's enough information here for a follow up. And now I say, well, now you got me, now I'm all ears. You're telling me that we knew this was a problem and in 2019 we have all these hearings and Ola says here's what's gotta be done to fix it. And now you're telling me it's not. So what I did with these sources, Kenny, in August of 2024 and this timeline is important in order to whittle it down because there's hundreds of CCAP recipients, daycare centers that get it. I just said, okay, let's look at the top 10, the top 10 in terms of money received from the government. So the top 10 daycares, money wise, let's just start there. And that's what we did. And the tip was, hey, a lot of these places have no children. You can go by there morning, noon and night. There's no kids, no adults, nothing that even on some buildings that says daycare center for that matter. So now I was really piqued my interest. So we spent Kenny from August, September and October three months worth, on and off. We couldn't do it every single day. We visited all 10 daycare centers and we got all of their records, all of their safety records, all of their licensure records, everything we could think of on those 10. And we painstakingly went in the morning,

[Kenny]

noon and evening of 2024.

[Jay Coles]

Yes. So August of 2024, almost two years ago now.

[Kenny]

Yeah.

[Jay Coles]

So we were very thorough to say, you know, we would go and we wouldn't see any children, we wouldn't see anybody, we'd knock on doors, the whole nine yards. We could never find anybody there.

[Kenny]

You know, just as a side note, that's what makes you news folks, you journalists, a pain in the ass. You actually do credible research and you have sources, more than one. And you go out and you do the legwork.

[Jay Coles]

Yes.

[Kenny]

And you're Such a pain in the ass.

[Jay Coles]

You're a pain in the ass. Cause we're taking the time to do it right. And. Oh, there's another element to it, Kenny. I'm glad you brought it up. There is another element to it that you also have an obligation to be fair to those you might be about to accuse of fraud. You have to give them an opportunity to respond.

[Kenny]

Here's what we're going to report tomorrow.

[Jay Coles]

What do you have to say about it?

[Kenny]

Yeah. Yeah.

[Jay Coles]

And so part of the visits were also that after we spent three months going morning, noon, and night not seeing, we decided to focus on the top three or five because we couldn't do all 10 in one story. And so then we started to. To see if there's anybody there that would talk to us, because we would also call them on the phone, Kenny. And it either would be a phone number that's not working anymore, or you could leave a message and have somebody call you back. And that's what I did. And we never heard back from any of these daycare centers. So this is August, September, October. We're deciding we're gonna go to air in November. And the reason we decide to go to air in November is a source tells me that the federal government is investigating CCAP right now. So I thought, oh, what a great headline. If that's the case, I'm gonna call my federal sources and say, is it true? Because I've been looking at some of these daycare centers that receive CCAP money to the tunes of millions.

[Kenny]

I bet you were jumping out of your skin. Oh, I'm knowing you the way I know you. I bet you were walking this far off the ground at all times.

[Jay Coles]

It was a newswoody day.

[Kenny]

It really was. Yeah, Newswoody. Yeah, exactly.

[Jay Coles]

Because I'd spent three months on and off looking at this. A lot of time and effort, and really dotted the I's and crossed the t's. And now if I could come out of the gate, Kenny, and say, tonight we've learned there's a federal investigation into the Childcare Assistance Program. And we're looking at the same program. It gives you that entree in. Right. So I get ahold of federal investigators and they go, yeah, about that, Jay. And this is the third time this has happened to me in my career from the feds. I've had it happen at the local level, but only three times with the feds. They go, we're aware of what's going on, however, we are investigating them. But we need a big Favor from you. And I was like, oh, I've heard this twice before, I know what's coming. Can you please hold off on the story? If you report it now, then it could screw up the whole federal investigation. Gives them an opportunity to collaborate with witnesses. You get your story straight. I get my story straight. They can destroy evidence, they can change their whole creature of habits that they're. So I go to my boss because I can't make that decision unilaterally. My boss has of course agreed. We're not going to. We're not. No story is worth screwing up a federal investigation.

[Kenny]

And folks, we're purposely leaving out the name of the feds.

[Jay Coles]

I decided not to say which federal agency or which federal investigators, cuz there's a whole bunch just because those were, as I looked back on it, Kenny, I would consider them private conversations and I guess without their permission, I should but suffice to say federal investigators, that's all you need to know. And so this is November of 2024. We don't know. So I keep checking back in December and into January a little bit with the Fed saying, are you any closer? No, we're not any closer. This is going to be a while. So we decide how can we attack this story. We won't be able to use the word fraud investigation. We really can't use the word fraud because we never even got an interview with anybody or had any documentation of fraud. But third, what can we say about what we know and what we knew, Kenny? And what we could report was after getting all their safety records, we could show lax oversight. And we took the top three daycare centers with the top three money and said these are egregious safety violations. Some have their licenses conditionally put on pause. It's so bad, right? So we thought, okay, we can show that when we went there, there was nobody there. Multiple times to multiple daycare centers. We could show that when we tried to reach out to them and find them, we couldn't find them. We could show the millions of dollars that they were receiving even though they were running daycare centers that the state themselves had said posed a serious health risk to the kids. And we thought it would be pretty self evident when you're going and there is nobody there that would show the viewer and any other investigators out there. Which by the way, the federal investigators wished me luck. They said, keep doing what you're doing, keep going because we're watching what you're doing.

[Kenny]

Yeah, I was gonna ask you that. So they were okay with that approach.

[Jay Coles]

Yep. As long as. Yep. And I cleared it with them. They said that would not screw up the investigation. And they said, keep doing what you're doing because this could actually end up helping us. We might get more information fleshed out. So we took a little different approach than. Nick. Shirley is my.

[Kenny]

Let me play the role of the naysayer. I'm going to criticize you here.

[Jay Coles]

That's okay.

[Kenny]

Just for conversation's sake.

[Jay Coles]

It's all right.

[Kenny]

So you're a lap dog to the feds, are you?

[Jay Coles]

Yeah.

[Kenny]

Well, that's what I'm. That's what I'm. We're going to be reading later when we host the show.

[Jay Coles]

Yeah.

[Kenny]

And how do you answer that?

[Jay Coles]

Right. So very fair. A very fair question. And believe me, the other two times I had to do it. My career, I've had to do. I'm not the only reporter who's had to do it. We do have a responsibility as journalists. If you're gonna reveal confidential information that could harm someone, put someone at risk, screw up an entire investigation, you have an ethical responsibility, within reason. Within reason. To not do those stories until it's time.

[Kenny]

Are you talking morals?

[Jay Coles]

Yeah. You gotta have some ethics. Yep. Because to be quite honest with you, Kenny, I wouldn't want to do that. I wouldn't want to be that reporter who screwed up a federal investigation just to get a story out. No story's worth that. And you always make a deal with them, don't you? So you say to them, I'll do

[Kenny]

this, but you're going to.

[Jay Coles]

We'll hold off, but as soon as you're ready to make a move and you're about ready to hand up an

[Kenny]

indictment, you're going on camera.

[Jay Coles]

Yeah. Or you're going to execute a search warrant. You ever wonder how those reporters yesterday knew all those daycare centers to be at?

[Kenny]

Well, I have a feeling. I know.

[Jay Coles]

Sure. Because you make a deal and say, I'll hold off and not report on this stuff that you want me to hold off on, but I want first dibs when it happens.

[Gabe]

And that's all fair.

[Jay Coles]

And I do think that's the responsible thing to do. And you're not in the hip of the government, because now the government knows, you know. Right. And so they better follow through or you'll be doing that story.

[Kenny]

When did the story finally air in? It would have been January of 2025.

[Jay Coles]

So we started in August of 2024. In November, we were told. Please. They didn't demand it. They just asked a favor of us if we could hold off on mentioning the investigation and mentioning fraud. And we agreed, we thought that was reasonable. But in January, as we were kicking it around, Kenny, we thought we had a way to get around that because we had gathered so much good information. And by seeing me knocking on these doors with nobody there, morning, noon and night, day after day after day, the millions of dollars they were receiving and this lax oversight, because we believed lax oversight is what we're talking about here. Because there was no good oversight, Kenny. There's all this fraud that's been discovered now. So we thought it was all relevant and it would be very clear to the viewer. No one was at these daycare centers.

[Gabe]

Right?

[Jay Coles]

So that's. And I called the feds and said, this is what we're planning on reporting. We're not mentioning fraud investigation, we're not mentioning fraud. We're going after the state for lax oversight and the inability to cut off money to these daycare centers when they had terrible safety violations for years and years. And I can tell you this also. So we're gonna play my original story here shortly from January 28th of 2025. I did subsequent stories, many follow ups. And one thing I also found, Kenny, after I did the initial story. When we talk about this lax oversight, remember, Feeding Our Future was administered by the Department of Education. Right. Minnesota Department of Education doled out the money, even though it was federal money. DHS and the Department of Children, Youth and Families were the ones that oversaw ccap. So there's the oversight of ccap, the childcare assistance program with DHS and dcyf. And then you have Feeding Our Future, which was handled by the Department of Education. My investigation discovered that a guy who was in ccap, a license holder and a daycare operator with CCAP, had such a bad safety record, such poor safety violations that put kids at risk, the state actually shut him down and pulled his license. So the state of Minnesota Department of Human Services pulls this Guy's license in 2022 or something like that, Guess where he ends up getting charged and busted and convicted in Feeding Our Future. Right. So it showed. We had an example where this state agency on your right, DHS, is pulling his license and cuts off his money. 1.8 million he got before they cut him off. He goes over to Feeding Our Future, Kenny, and gets charged with stealing and convicted of 1.2 million.

[Kenny]

One of them was a side hustle.

[Jay Coles]

Yes. So it was clear that again, terrible oversight, lax oversight. You don't have government entities like DHS as Soon as they pull a license from somebody, you would think they would say, we gotta put out an email to every other state agency that if this guy comes around looking for free money, just know he got kicked out of the CCAP program and that wasn't happening. So he gets kicked out of CCAP, he gets 1.8 million from CCAP. He gets kicked out, he goes over and he steals 1.2 million from feeding our future. Cuz it was two different state agencies. So I wanted to give everybody that whole context because what are we called now? Legacy media, Mainstream media. We're always ripped on all the time. Yeah, that Nick Shirley was the hero here because he went out in front of the Quality Learning center, which was in my story, by the way, and was part of the raids, by the way, yesterday. And all of a sudden Nick Shirley's exposed all this fraud. And I'm thinking, sitting there telling myself, well, we kind of did too. There were other reporters that did in 2017, 18 and 19. We're just doing a follow up in 2025 to show that the problem still exists. And yet we got hammered because supposedly we didn't do anything. So I thought, well, today, since there were raids executed yesterday, 22 search warrants for daycare centers and autism centers and I think some transportation companies, I don't know what the other ones were. And some of those daycare centers were the ones we looked at. I thought, let's set this all up and we'll show my first story and then we'll get into maybe why, right? Maybe why. Six years later I was able to find this because of what happened in 2019 when they shut down the investigative unit. Right. It all adds up together. So let's just start with my story. The first story that anybody did on this since 2019. January 28, 2025.

[Mark Ellis]

Gabe winner, Tim Walls and state lawmakers recently pledged a crackdown on fraud in state government programs after scandals questioned their oversight.

[Jay Coles]

We got complaints about the child care assistance program and took a closer look at some of the daycare centers receiving millions of your taxpayer dollars. And we found reports of violations state investigators called a threat to the safety of children at centers that continued to receive those federal dollars.

[Mark Ellis]

J. Cole spent months looking into these issues. He joins us now with what he's found and a story you're seeing. First in five, Jay Lindsey.

[Gabe]

CCAP is a $34 million state program that receives federal funding. It benefits more than 12,000 low income families each month across the entire state. Learning of growing concerns about the program from sources at the Capitol, I started looking into some of the daycares receiving the most money. Despite many serious safety violations over multiple years, they continue to receive funding. And now some state lawmakers want an investigation into what they call a lack of oversight of the CCAP program. I started by visiting Quality Learning center daycare.

[Jay Coles]

So it is that 14B which sits

[Gabe]

right in the heart of Downtown Minneapolis. Between 2019 and 2023, the Minnesota Department of Human Services found 95 violations at this location. They range from failure to keep hazardous items away from children to no records for 16 children, which include things like immunizations, emergency contacts and medical needs. So state investigators place Quality Learning center on a conditional license in 2022. I went to the daycare's location several times and only once did I see people there. Oh, that's your daycare. But I did not see see any children.

[Jay Coles]

So there, there are 80 kids in there. No, no, no, no, no. After school. Okay, gotcha. All right, thank you.

[Gabe]

DHS declined an interview, but in a statement acknowledged Quality Learning center was put on a conditional license because of its poor safety record. But it still received nearly $8 million in taxpayers money since 2019. Its conditional status removed in 2024. I also went to yet Minnesota child care center in this south Minneapolis building. I found it at the end of this small hallway with a steel door, no windows and no visible security cameras.

[Jay Coles]

That's the sign for the place.

[Gabe]

State records show between 2021 and 2023, the daycare had 36 violations, some of them serious. They failed to request initial background checks on six staff in 2023 and failed to request repeat background checks on eight staff in 2024. Ultimately, the state would accept corrective on these violations.

[Jay Coles]

Wasn't anybody here last time either.

[Gabe]

I visited several times and each time no apparent sign of any workers and each time no apparent sign of any children since 2018. Minnesota Child Care center, however, received eleven and a half million dollars in CCAP money. I asked DHS why daycare centers could still receive millions of dollars with questionable safety records over multiple years. In a statement, DHS said under state law, they can only stop payment, quote when a provider intentionally gives false information or submits false attendance records. A provider is operating after a suspension or revocation of its license. There's a credible allegation of fraud and or a provider refuses access to attendance records.

[Jay Coles]

What does that say to you?

[Kenny]

It says that the oversight is incredibly lacking.

[Gabe]

I shared our findings with house speaker designate Lisa Damon.

[Kenny]

Are we keeping kids in Minnesota safe and what you're showing me here brings that very much into question. You know, Jay, you have pages here that are publicly available with repeated failure to keep hazardous items away from children, failure to maintain adequate staff to child ratios, background checks, failing to keep personnel files. These are repeated violations.

[Gabe]

As I was looking into the daycare center violations, I also found a connection between CCAP and the Feeding Our Future scam, which bilked $250 million from the state. In 2023. A man named Abdelkadeer Kadiah was charged with stealing a million dollars in taxpayer money in the Feeding Our Future case. He's waiting to be sentenced after pleading

[Jay Coles]

guilty to wire fraud.

[Gabe]

But we also learned Kadiah also operated into Saar Child Care center in Minneapolis. The facility received $1.8 million in taxpayer funds between 2017 and 21. But the license was revoked at Kadiah's daycare was shut down. He has not been named or charged with any crimes connected to ccap, however. Now, I've been asking for weeks why Kidai's license was revoked. Late tonight, DHS sent over this 86 page document explaining why some of the more serious reasons include violations directly related to the health and safety of children and providing false and misleading information to DHS. DHS also told me they have 62 active CCAP investigations for family child care and child care centers. And as far as the two day care centers in our story are concerned, I reached out by phone to the names and numbers listed as the licensed operators and I've not yet heard back. So some new information that There are now 62 active investigations into that program.

[Mark Ellis]

I'm speechless.

[Jay Coles]

It's a lot of money.

[Gabe]

Yeah.

[Jay Coles]

And this is just breaking tonight, correct? Yes. We're going to stay with it, obviously,

[Gabe]

and see what happens next. State lawmakers have told me that they would like this before some committees. As soon as they can get the

[Jay Coles]

committees together, they want to bring it

[Gabe]

to some committees and start investigating and looking into it a little bit deeper.

[Mark Ellis]

Again involving our children.

[Jay Coles]

So There you go.

[Kenny]

22 of those search warrant affidavits remained sealed today. So. And of course, no charges are filed yet.

[Jay Coles]

Correct.

[Kenny]

So we still don't know the names and who the leaders were.

[Jay Coles]

Right. I know our news team in Channel 5 did. I think they contacted or when they went out to the sites, I think they talked to two of the daycare providers. They didn't say much. And what's interesting about that story we did way back in January of 2025. If you notice, one was Quality Learning center, which was part of the raids yesterday. And you notice they, they were still. It was crazy to me, Kenny, that they have all these significant problems. Nobody's ever at any of these daycare centers. Yet the money continued to flow. DHS wouldn't cut off any of the money. And you saw in the piece, they tried to explain it as well. By law we can't, but the lawmakers have to change the law before we can cut off the money. Which I was later told wasn't entirely true. And why that is so important, Kenny, is this goes all the way back. And again I was told six years. Yeah, it would have been six years after the Office of Legislative Auditor report in 2019 that the CCAP problem was continuing. That's the whole reason we went back to look at it. And now, because now if you look at the timing, Kenny, it's so interesting. The sound bites we're going to play now. It makes sense. When did they close down the fraud unit? 2019.

[Kenny]

Yeah, yeah. Before we change gears though, I want to take a quick break. But the. Have you ever seen, you ever seen those money machines where you step in and they turn on a fan and there's like $101 bills in there? You're in that wind tunnel, you're trying to grab the money.

[Jay Coles]

That's a CCAP program, isn't it?

[Kenny]

And you see, you can see through the glass and the money flying around. They're getting busted down there. So instead of getting out, you thought, I better grab more money faster, just as fast as I possibly can.

[Jay Coles]

Listen, these fraudsters aren't stupid, right, Kenny? They noticed something must have changed after 2019. The big report comes down, we're going to clamp down. We're going to get tough on CCAP fraud and violations. And then when nothing was happening and nobody was getting busted. If you're the crook, what do you do? Well, let's just keep going. Let's get back into that wind tunnel and see if we can grab a few more hundreds. It's pretty bad.

[Kenny]

It's just. Pockets are overflowing. They're tucking it in there.

[Jay Coles]

Shirt.

[Kenny]

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So I ended up watching that hearing yesterday that Kristin Robbins was running. Do you know, tell me the official name of that hearing.

[Jay Coles]

Oh, it's. Well, we just call it the Minnesota Fraud Committee, but it's the House Committee on Fraud Prevention and Government Oversight.

[Kenny]

Right. So I watched this live and I can never be a politician.

[Jay Coles]

First of all, painful at times.

[Kenny]

Yeah, it's just horrible. But wow, it was really fascinating when Kristen introduced and then started talking to Jay Swanson, a former fraud investigator, in fact deal with dhs.

[Jay Coles]

Yeah, in fact, Kenny, he was, I got his title right here. He's now since retired obviously. But at the time, from 2014 to 2019, again, 2019, a key key date or key year, he was the manager of childcare assistance investigations. So he was the manager of CCAP investigations and part of that investigative unit that was specifically assigned with BCA agents to investigate CCAP fraud.

[Kenny]

A former State patrol officer and all the investigators there were former lawmen. We've already talked to one whistleblower, correct. A former lawman that worked there. Yeah, I'm sure those two work together.

[Jay Coles]

Yeah. Remember we interviewed Agent X. He was a Ramsey county forensic investigator.

[Kenny]

That's why I couldn't remember his name. I'm sitting here going, God, you dummy, you can't even remember his name.

[Jay Coles]

He was Agent X and he was much like Jay Swanson was investigating in 2013 and 2014. CCAP, daycare center problems. So he was trying to say this goes back to 14 and 15 when this fraud investigative unit started. And remember our Agent X was working with the BCA agents. The ICA agents were with dhs. They were embedded with them.

[Kenny]

I thought as I started watching it yesterday, I think there's nothing I'm going to learn here. This is going to be boring. This is just going to be more of the same shit repeated. It's, you know, this is stuff we've already heard. Oh my Lord, was I wrong?

[Jay Coles]

Well, and think about it, Kenny. This might be the first whistleblower to come forward. I know this was his first time speaking publicly about it. Who said? He said on the record yesterday at that committee hearing effectively and we'll get to this, that in 2019 the Walz administration, now I'm not saying Governor Walz ordered it, but the Walz administration ordered effectively shut down that fraud investigative unit. Told the BCA agents to go home. We're not doing any more investigations. We're certainly not referring any for any criminal stuff.

[Kenny]

This is the same team that is now fighting for you, now fighting for us.

[Jay Coles]

And so his testimony was really eye opening cuz he was going deep into the bowel saying not only did they discourage it, not only did they retaliate against this, which we've already heard. He said they actively shut down the fraud investigative unit.

[Kenny]

He's saying stuff. I'm sitting there talking to him on my computer. I'm talking back to Jay. I'm going, are you shitting me?

[Jay Coles]

Come on man.

[Gabe]

Really?

[Jay Coles]

His stuff was great.

[Kenny]

Let's, let's air some of the cuts.

[Jay Coles]

Yeah, okay, so the first one, I'll set it up for everybody. Right Kenny? Yeah, you and I got this. Both piqued our interest. He's telling the committee about how they would get some of these tips right. About the daycare fraud and this bite. He's referencing, Kenny, that they were starting on a weekly basis. Keep this in mind. He said on a weekly basis they were getting tips from the fraudsters and the kickback artists saying, where's my money?

[Kenny]

How's that even happen? How do they. They're calling. Wait, what?

[Jay Coles]

I shouldn't laugh, but it's pretty funny.

[Kenny]

It's like you're calling 911 to turn yourself.

[Jay Coles]

Yes, I got a body here. What do I do with it?

[Kenny]

Yeah, can you guys come pick up this guy I just shot?

[Jay Coles]

Can you help me? So this is the first bite of Jay Swanson, the former fraud investigator at D.C. dHS, explaining how they were getting some of these tips and they were coming from the fraudsters themselves.

[Gabe]

Gabe, as an example, one day we received a call from a CCAP mother who called to complain that her child care center owner had stopped paying her the monthly cash kickback they had agreed upon. Another day, a former co owner of a center called to say that he had been cheated out of his share of the fraud proceeds. Yet another day, a fire department called asking if a child care center was still operating because they had been trying to conduct a fire safety inspection and had made multiple trips there on different days at different times. But there were never any children or staff at the center. I checked and found that in the last 12 months we had paid the center approximately $1 million and that they were billing for the care of approximately 90 children at a time during two shifts from 6am to 10pm, seven days a week.

[Jay Coles]

To 10pm seven days a week, guys. And there's never any kids there ever. And I just love. Hey, I'm not getting my kickback money. Can you guys help me with that?

[Kenny]

Who can I talk to?

[Jay Coles]

Who can I talk to stat? And then another call. Hey, I'm not getting my fair share of the fraud proceeds. Unbelievable stuff, right? So, in fact, so many tips, Kenny, that they said they couldn't even. They had to settle on a dollar amount. And I think the dollar amount was, unless it was over a million bucks, they just didn't have enough time. So you might have had some people out there getting defrauded. Maybe it was 250 or 500,000. There was a dollar amount. They just had to set a dollar amount, Kenny, to say we don't have enough investigators. So let's say you ripped off a daycare center. If you had a fraudulent daycare center and you ripped off like 300,000, you might not have even made the bar to be investigated because they had too many in the multimillions of dollars they had to focus on. Think about that for a minute. There's some fraudsters out there who Got away with this. And they're living. That money is gone. And who knows who they are, but trust me, they're there.

[Kenny]

And I'm here. I am. Okay, I'm gonna write a check for my mortgage.

[Jay Coles]

Exactly.

[Kenny]

Oh, my God. LP is so expensive in the winter. I gotta write that big, giant $700 check.

[Jay Coles]

And you hear me whining about, oh, side by side's too much money for me right now.

[Kenny]

We're suckers.

[Jay Coles]

Aren't we, though? So then, Mr. Swanson continues. Kenny. And this is another great bite that you and I both picked up on right away. In the second bite, he talks about looking at. He's discussing with another investigator looking at the cell phone.

[Kenny]

Oh, they call it forensics channel.

[Jay Coles]

Forensics. Right. I'm sorry, the forensic investigators. Thank you, Kenny.

[Kenny]

I love that.

[Jay Coles]

I do, too. Forensic investigator just sounds so cool. What kind of investigator are you? Forensic.

[Kenny]

I'm forensic.

[Jay Coles]

How about you?

[Kenny]

Yeah.

[Jay Coles]

Well, essentially, they're talking about a cell phone of another fraudster. And pay close attention to this bite because we're gonna laugh at this one, too. So Mr. Swanson tells the committee this about the cell phone he looked at

[Gabe]

from an owner's cell phone. I was showing a text conversation between the owner of the center and a friend. The friend had asked the owner, how much longer are you going to do the daycare scam? The owner replied, another year or two. I'm going to buy some nice homes in Nairobi. The owner was on public assistance at this time? Oh, they happened to be on vacation in Dubai. Oh, sure. When this text conversation took place.

[Kenny]

So the most expensive location in the whole world.

[Jay Coles]

Maybe Monte Carlo Might. Might.

[Kenny]

You know, It's Monte Carlo without the water.

[Jay Coles]

It's Monte Carlo without the water. Exactly. And so listen to that. When we heard that Kenny, he says, the guys on public assistance has enough money for a cell phone and cell coverage and the cell phone bills and is on vacation in Dubai.

[Kenny]

He's standing there in the wedding suite in his underpants, looking down while he's got a bevy of women in the other room getting ready for round three.

[Jay Coles]

And you and I, of course, have never experienced anything like that.

[Kenny]

He's out here shoveling snow. We're the fools Falling on the ice we're the fools. Oh, my God. My God.

[Jay Coles]

So. So, Kenny, how many. How much longer are you going to do this? He calls it a scam. How much longer are you going to do this daycare scam?

[Kenny]

I don't.

[Jay Coles]

Maybe another year or two. It's got to get A couple homes in Nairobi and I'll be good. I mean, what the hell?

[Kenny]

I wonder if they ever got him, that guy in question.

[Jay Coles]

It's too bad we couldn't get Swanson in here.

[Kenny]

I would have loved a lot of the egos on these fraudsters.

[Jay Coles]

It's amazing.

[Kenny]

They didn't know when to quit.

[Gabe]

No.

[Kenny]

And run. I mean, I would have had beforehand. I would have had $5 million. I would have wrote it on a post. It.

[Jay Coles]

That's my goal.

[Kenny]

When I get 5 million, done. I disappear, I'm gone. I'm never coming to the United States again.

[Jay Coles]

You're set for life if you're smart. Yeah, but here's what prosecutors told me. I can't tell you which prosecutor told me this, but I get done. This is an off the record conversation. In other words, background only. And I was joking, the same joke you're making. I said, you know what I said, why did they keep going? Why did the Safari restaurant get all the way to 14 million? What were they thinking? Are we having that kind of conversation?

[Kenny]

Yeah.

[Jay Coles]

I said, I just don't understand that. What kind of mentality. I said, especially known. I'm sure at some point they shared information. They had to know investigators were starting to get onto them. There had to be some heat. And yet they still kept going. And this investigator put it to me this way and this made sense to me, Kenny. He said, let's say you came from a third world country in East Africa that's dirt poor. You haven't had a dime to scratch together with a nickel your whole life.

[Kenny]

Yep. Well, that kind of describes me right now. Yeah, go ahead.

[Jay Coles]

It just didn't come from East Africa. It just came from central Minnesota. So. So he said, now you're here and you're scraping the make ends meet.

[Kenny]

Sure.

[Jay Coles]

The American dream still.

[Kenny]

Oh, I mean them.

[Jay Coles]

Yeah.

[Kenny]

Okay. Yeah.

[Jay Coles]

So you should be able to relate to this story better than anybody. So he says to me, and now it's the American dream, but it's not hard to realize. And they're struggling. And you got a friend of yours, another one of your friends from the old country, says, hey, listen, man, I got us a scam. I got us a scheme against the government. And I can get you 2 million, I can get you 3 million. You just gotta come play the game.

[Kenny]

Yeah.

[Jay Coles]

And this prosecutor said to me, he said, we've talked to him and we've interviewed him, especially when we do a plea deal. Now think about this. He goes, so, Jay, would you, if you were poor Newly moved to this country, struggling with the language, and all of a sudden one of your buddies says, I can get you 2 to 3 million, and wouldn't you sign up? And he said they were also coached that, listen, since you're not at the top of the scheme and the scam, you're just part of the soldiers and the worker bees. You get busted, you can do a plea deal. You're gonna serve two to three years. So the prosecutor I said, well, that's

[Gabe]

still two to three years.

[Jay Coles]

He goes, yeah, but if you are that guy, and for the first time in your life, you could get two to three million dollars and are told you're only gonna get two to three years in prison, probably be out to me, then it's worth it. All of them started to say, I'll take the chance. I'll roll the dice. If I get caught, I'll be out in less than three years. And that money's already long gone to another country.

[Kenny]

There's probably some prison fraud they could pull while they're in there too.

[Jay Coles]

Right. They'll hone their skills. So it kind of started to make sense to me why they would risk this and risk going to prison. They put it in simple terms. When you're that desperate and you're thinking, only a couple years in prison for 3 million bucks, I'll do, especially federal prison. Much different than state prison. Not nearly as nasty. So those two were pretty comical.

[Kenny]

Oh, federal prison is a cakewalk compared to state prison, generally speaking. Okay.

[Jay Coles]

Yeah, yeah. Most would rather go to federal prison than state prison.

[Kenny]

All right. I'll keep that in mind when I'm doing crimes.

[Jay Coles]

Yes. Cause far more, you know, murder is a state crime. Oh, rape is a state crime.

[Kenny]

Okay.

[Jay Coles]

So by nature, the federal offenses are largely money stuff, for the most part. Money stuff. There can be some drugs, There can be some violence.

[Kenny]

How's the food? How's the food?

[Jay Coles]

That I don't know. All I know is, is there any

[Kenny]

time for romance in prison?

[Jay Coles]

I'm sure they find movie night. I bet they find time. But I. You know. So again, your thought is, why would these people do it? Well, if you could get 3 million bucks and you're out of prison in two years, you're set for life. Right. So then. So the hearing continues, and Mr. Swanson now starts talking about how in 2018 and into 2019, he's getting pushback. Kenny, his higher ups are starting to say, what are you doing? We don't want all this fraud exposed and put out there. And I think the reason being would be simple enough is that they got a new boss in Governor Walz. He's just newly elected and in office in 2019. They don't want to lose their jobs. If there's a whole bunch of fraud going on, we don't want anybody to know about it because I'm getting paid 150 grand. I'm getting paid 180 grand. 150, whatever it might be. Right. So now they're getting pushed back in the investigative unit to not do anything. And that's what this next soundbite is. He's talking about an investigative report that he had to put together for the Office of the Legislative Auditor. All right. And he then submits it to his boss at DHS to be forwarded to the ola. And this is what his boss says to him.

[Gabe]

Gabe, more than once I heard an owner or employee respond when we asked where they first learned about the daycare scam.

[Kenny]

Oh, this is.

[Gabe]

They would say they had first heard about it.

[Jay Coles]

Stop that. Okay. I'm one bite ahead of myself.

[Kenny]

Let's set this one up. Gabe, can you rewind that?

[Jay Coles]

Rewind it. I screwed that up. I'm one bite ahead of you. Sorry. Gabe.

[Kenny]

This is a really good one, too.

[Jay Coles]

This is a really good one. Yeah. So you know this one. Set it up.

[Kenny]

Kenny, tell me the year.

[Jay Coles]

So this would have been 2017, I believe he's talking about.

[Kenny]

These folks were under the impression that they came over here to escape war.

[Jay Coles]

Yes.

[Kenny]

And a lot of them were in refugee camps in Somalia because there is a civil war between Somalia and Somalia land.

[Jay Coles]

Yes. Somalia.

[Kenny]

Yes. It's two different countries there. But they really come prepared, Jay. They know they're not like other refugees or aliens that come to our country. They know ahead of time exactly what they're going to do. Because they knew about the fraud before we did in Minnesota.

[Jay Coles]

Correct. And this is his testimony to the committee explaining where some of these fraudsters were sitting in refugee camps. And this is what they came up with. This was their plan to come over here and be fraudsters.

[Gabe]

Gabe, More than once I heard an owner or employee respond when we asked where they first learned about the daycare scam. They would say they had first heard about it while in the refugee camp in Kenya. These individuals told us that they had heard you could run the scam in a number of different states, but it was easiest to. And you could make the most money doing it in Minnesota.

[Jay Coles]

Wow.

[Kenny]

Jay, have you ever read any history books about gold Finds around the country. I've read it all starts with rumors, people, you know, and it was back in the 1800s before, you know, news traveled quickly. It was really slow. They're sitting around at the local bar, the pub, whatever, campfire, saloon, and what you hear. They gold up in Alaska. No, the hell you say. Really? Oh, yeah. Billions of dollars of gold. It's just. Just. It just falls right into your hand. Well, I'm going.

[Jay Coles]

I'm going. And the women are pretty, I hear. Oh, yeah, that's what.

[Kenny]

That's what happened. And over here, we're. Da, da, da, da, da. Oh, look, it's snowing. Oh, the twins sure sucked this year.

[Jay Coles]

Da, da da, da da.

[Kenny]

Oh, what about that Vikings team?

[Jay Coles]

And this had to be 2017, 2018, almost. Maybe into early 2019 that we're talking about.

[Kenny]

Yeah.

[Jay Coles]

And so not that long ago. And, Kenny, I told you the first thing I pictured was them sitting in a Kenyan refugee camp around an oil barrel filled with wood that they've burning

[Kenny]

to keep warm in the desert mobile fire at night.

[Jay Coles]

They're all sitting there saying, so when we get to America, how do we rip them off? What do we do? And they're just having a conversation. And one goes, hey, Minnesota. That's where we got to go. We got to get on a boat. We got to get on a plane. Once we get off the boat, we got to get to Minnesota.

[Kenny]

If anybody ever calls you on it either, just tell them they're racist and go about your business.

[Jay Coles]

Yeah, just tell them they're racist. They won't bother you. So these guys in 17 or 18, Kenny. If they're sitting around in a refugee camp in Kenya targeting Minnesota, you know, it had to be going on from 2014 to that point, like Swanson says, because now, like you said, the word is getting out. The word is getting back to him in the refugee camps. Hey, when you get there, we got a perfect grift for you. Crazy, right?

[Kenny]

Oh, my God.

[Jay Coles]

Crazy. So then the next one is the bite. I gotta jump.

[Kenny]

Jay and his team, you know, I picture them as labs, and all they want to do is, you know, retrieve a duck. Right, Right. That's all labs want to do, and that's all investigators want to do. They want to find a good, solid case they can sink their teeth into, bring the perpetrators, the bad guys, to justice, get a pat on the back, go to the next case. That's all they want to do.

[Jay Coles]

Correct.

[Kenny]

Can you imagine being met with the resistance that they were met with by their superiors?

[Jay Coles]

And this is what Jay Swanson tells the committee next. This is the bite. I got ahead of myself on. Ahead of myself on a little bit. He's now going to prepare this report for the Office of Legislative Auditor detailing all the fraud. His manager says this to him. Gabe.

[Gabe]

When I forwarded my answer regarding what fraud trends we were seeing in ccap as I had been directed, I soon had a senior DHS official in my office, angry, red faced and almost yelling. The senior DHS official told me to delete a number of paragraphs of the document that I had sent. I then advised this official that I believed what they were telling me to do was illegal.

[Jay Coles]

Yeah, you think it's fraudulent. You can't. You can't delete stuff from an official report that you've been required to submit. You're doctoring government in and of itself. That's fraudulent, if you will.

[Kenny]

You really. You did a great job and you really screwed up. Yeah.

[Jay Coles]

And then it was a little bit later in that bite. He says, the boss says to him, do you understand the shitstorm that's gonna happen when you submit this report? So they were more worried about the fallout and avoiding that Kenny than actually having this investigative unit do its job.

[Kenny]

Do you have the cut where he doesn't. He refuses to name names. But that guy that we're referring to is still working there.

[Jay Coles]

That's my understanding from his testimony.

[Kenny]

Yeah.

[Jay Coles]

He said, and I'll get to that last sound bite where he talks about people still being there.

[Kenny]

Okay.

[Jay Coles]

And so I. But, but yeah, I didn't have that particular sound bite. But yes, a lot of these folks are still there, apparently, according to him. And I can share with you what Ryan Raiche down on TV news found out about that as well.

[Gabe]

To that.

[Kenny]

But first I want you to take a breath here. Take a break, because I want to talk about. Well, I want to talk about what really matters in this state. The fishing opener. It's just a few weeks out. You realize it's coming up already. It's time to get it done. Get that new Alumacraft boat with either. Well, you have your choice when you go to Warner Stock in New Richmond, a Suzuki Yamaha or Mercury outboard and get it set up for a summer of fishing. They have it all at Warner Stock in New Richmond. It's the place, the perfect place to get a brand new Alumacraft fishing boat if you like to play captain on the party barge. Oh, you're in luck. Premier Pontoons. We're talking more than just a party barge. Though here, folks, Premier pontoons, top of the line. And Warner stock will take your trade in if you'd like to upgrade your power unit on either your outboard or your pontoon. Again, Warner stock champions in repowers. Get yourself a nice quiet purring four stroke from sales to service storage. Warner stock in New Richmond, the place for all your needs. Outboard repairs, that's simple. Electronic installs, trailer service docks, they do it all. Warner's DOC will ensure that your family will have a wonderful summer on the water. They've been going strong in New Richmond for 79 years. Get yourself to Warner's dock today. Jay. Yeah. Where do we go from here?

[Jay Coles]

Now we've got him telling. We're going to get right to this bites. This is Swanson telling the committee how badly the fraud committee was now being retaliated against Gabriel.

[Gabe]

In the following months, members of our unit were harassed and bullied by DHS officials in the following manner. First, DHS paid $90,000 to a consultant with no experience in public benefit program integrity or financial fraud investigations to label the CCAP fraud allegations in my email as unreliable and unable to be proven.

[Jay Coles]

Wow. Wow. Telling him his investigative work isn't worth a pile of crap.

[Kenny]

You know, hire me to examine your tax returns, you know.

[Jay Coles]

Right.

[Kenny]

It's just no. Absolutely no experience or qualifications whatsoever. Yeah. Oh, that's crap. That's crap.

[Jay Coles]

Kenny, come look at my IRS returns and make sure I'm doing them right.

[Kenny]

90 grand got paid though.

[Jay Coles]

90 grand for that report. Now, this next bite is kind of carries on with Mr. Swanson detailing this harassment, the bullying, the squashing of investigations on this unit, which eventually led to the unit being broken up. Gabe.

[Gabe]

Next, investigators could only contact BCA agents after receiving permission from a DHS official. Lastly, DHS officials advise the B.C. agents to vacate our building. They would no longer have an office at DHS.

[Jay Coles]

Get out.

[Gabe]

At this point. In June of 2019, I submitted my resignation slash retirement notice, effective July of 2019.

[Jay Coles]

So there you go. He couldn't take it anymore. He's out.

[Kenny]

I don't blame him.

[Jay Coles]

Yeah, I don't either. Right there, he says they kick the BCA agents out. Essentially, that fraud investigative unit was shut down in 2019. Here we are six years later with my stories in 2025 and the raids yesterday. And now we understand why there was no one doing the proper due diligence of investigating these seriously and turning them over to law enforcement.

[Kenny]

The thought of cleaning house doesn't occur at all in government. Nope. In my World. And I'm sure a lot of people listening and watching right now are thinking, well, DHS needs to be shut down. They need to. Everybody, Even the good employees. Sorry, Good employees. I know a lot of you were whistleblowers. You have to go, too. We have to start over completely.

[Jay Coles]

Key phrase, start over. So the last soundbite that I saved was an answer to that question. He says to the DA, he says to the committee, Mr. Swanson, because they were wondering what happened to these employees. A lot of the questions were, what happened to the employees that were at DHS that were squashing the investigations that killed the unit? And here's what he had to say.

[Gabe]

Gabe, you should also know that a few of the senior level DHS officials who harassed and abused our unit for committing the sin of trying to expose a huge amount of fraud in the CCAP program are still working at DHS today.

[Jay Coles]

There's your answer right there.

[Kenny]

That's.

[Jay Coles]

They're still there.

[Kenny]

That's Minnesota. That's government.

[Jay Coles]

Then. That would be seven years ago since they closed that fraud unit up. They're still there.

[Kenny]

So incredible testimony, Jay, the whistleblower we had on a few weeks ago, the gal, Faye Bernstein, she worked at the dhs, did she not? Yes.

[Jay Coles]

Yep.

[Kenny]

Still does.

[Jay Coles]

Yes. In fact, she just did an interview last week with Channel 5. Did you see that?

[Kenny]

Yeah. And she's been shuffled around. What is she now? She's proofreading press releases or some kind of bullshit job.

[Jay Coles]

She's in charge. She's in charge of redacting data requests. So she sits there with the black Magic Marker.

[Kenny]

Oh, she's the one that puts black lines in the middle of. Yeah, yeah.

[Jay Coles]

And so some things are being redacted that shouldn't be.

[Kenny]

And we only gave you portions of his testimony. He stuck around and answered questions for a while. Really fascinating to watch. And it's the first time that I've actually sat down and watched one of these hearings from start to finish. Because usually it's three minutes for me and I'm out. I can't take it. You gotta wait myself.

[Jay Coles]

You gotta wait through a lot to get to the good stuff.

[Kenny]

Jay, can you tell everybody how to get there?

[Jay Coles]

Oh, to the website. Yeah, yeah, yeah. It's real easy. Just go to all you gotta do. If you have access to this, and most of us do these days, just Google Minnesota. All you have to do is Minnesota. House Fraud Committee. You don't have to put in the formal title. It'll take you right to that committee page. You Go to the committee page, and right on the front page, it'll say, audio and video of past meetings. And you click on that and it'll be the most recent video. And you just. You can sit and watch it.

[Kenny]

And you. You can also watch it live if you want. True.

[Jay Coles]

Yeah.

[Kenny]

Watching it, though, on tape is much easier.

[Jay Coles]

Much easier because you can toggle back and forth and. And go through it. I like to listen to it live because then I can go back. Then I know where I can go to the taped one and find my stuff sooner. But sometimes the lead up to it, even though it's kind of dry and it's not gonna be part of what you use, like, for our purposes, sometimes there's enough. It gives you a little more context and understanding so that when you get to the good stuff, you got all the backstory as well. But, yeah, that's been my life for how many years? Kenny is a reporter. Watching those and having those meetings explains

[Kenny]

a lot about you.

[Jay Coles]

Yeah. Weirdo.

[Kenny]

To be honest. And then I've made no secret of my feelings about our governor, and I'd rather that you just keep your mouth shut about that.

[Jay Coles]

Okay.

[Kenny]

Just for your credibility.

[Jay Coles]

Thank you.

[Kenny]

But this might come as a shock. I don't like Governor Walz.

[Jay Coles]

Not surprised you said that.

[Kenny]

And he did his State of the State. Are we the State of Hockey? We are the State of Hockey.

[Jay Coles]

We're called the State of Hockey. We haven't got a cup yet.

[Kenny]

So he did his State of the State during a very important game last night, which, that alone made me angry. But he once again reiterated that he and his team have been fighting for you, and it's because of them that those search warrants were executed yesterday. And they are fighting for you. They will find these fraudsters, and we've made shiny new laws that will prevent fraud.

[Jay Coles]

Right.

[Kenny]

The one thing that lawmakers don't understand is your shiny new laws that will fine people for doing whatever doesn't slow it down at all. You morons. You're passing laws do not help.

[Jay Coles]

And if you knew the backstory from this guy Swanson, that is in the early parts of the Walz administration that they were shutting down a fraud unit. It's pretty remarkable that the governor can now stand there and say, look at what we're doing. I mean, it just. Even as a reporter, objectively looking at this, Kenny. Excuse me. It doesn't hold much water when you think about the last six years after the OLA report in 2019, this continued to go on. And if you notice he didn't even mention fraud in his state of the state until what, three quarters of the way through.

[Kenny]

I was watching the hockey, Jay.

[Jay Coles]

So was I, But I tuned into Hauser. I wanted to see what Hauser and the Houser said. Something like it came. It was a 45 minute speech and it came like 32 minutes in. And when he talked about fraud, he just talked about the fact that they're now stopping. Stopping. So. But

[Kenny]

DHS needs to be held accountable.

[Jay Coles]

They do. And think about it. Consider this again. We just did a one on one interview. Kevin Dorn did it with Gandhi. She's the new commissioner. Shereen Gandhi.

[Kenny]

Well, we heard from our whistleblower that she's not without guilt.

[Jay Coles]

Right. Well, she was the. Before she got into her position now she was the chief compliance officer. Compliance, meaning you comply with the program or you get kicked out. And then she went to assistant Commissioner and then now commissioner. And how does that happen, Kenny? How can you be the chief compliant officer and get promoted all the way to the top spot when you've had all these problems?

[Kenny]

They're all complicit, Jay. All of them. They all need to go. Every single one of them need to go. And if you hold DHS responsible, who else do you have to hold responsible? Who oversees all of that? Well, it's Governor Wall.

[Jay Coles]

It's Governor Walls because they're his appointments.

[Kenny]

And he will not, under any circumstances take blame for anything he has done wrong. He also always shifts the blame, and in a lot of cases, he blames Trump. And Trump has no idea what the hell he's even talking about.

[Jay Coles]

Yeah, the Trump stuff is just. That doesn't make much sense at all because this was happening long before this

[Kenny]

little spat between Cash Patel and Governor Walls. That to me, and I said this on gl, so I apologize for repeating it, but that seems like a South park skit to me. Those two screaming their heads off at each other. It's just so absurd, isn't it?

[Jay Coles]

Yeah, Beavis and Butthead, South Park. Yeah, right. All that stuff. Well, and here's the thing. The feds were the ones that got this ball rolling, not the state of Minnesota. The federal government's really the one that decided to put the hammer down and go after these folks. And so I know it's politics and it's an election season few months away, so he's gonna say all those things that he needs to say. But bottom line, the last six years, seven years, all under his watch. And how do you explain the disbanding of that fraud unit in dhs. How do you explain that? Right. When all the whistleblowers were saying, we found some significant stuff, but it's even way bigger than we could imagine. And let's be honest, the facts are the facts. The Walz administration, dhs, dcyf, none of them did enough to take, serious enough to get rid of it.

[Kenny]

All of them are guilty. If any one of them had any class or morals or anything, they would have excused themselves long ago.

[Jay Coles]

And here's another interesting thing. I talked to Ryan Raiche, Investigative Reporter, Channel 5. Talked to him two days ago as I was getting us ready for this show. I said, hey, I know you asked Governor Walz and Governor Walz's office how many people have been fired at DHS since all this started to break?

[Kenny]

Yeah, great question.

[Jay Coles]

Yeah. So I asked him Monday, I go, have you still gotten an answer? No answer. He's not received an answer yet back as to how many people were let go because of all this persistent fraud and persistent fraud that they kind of turned a blind eye to in some instances.

[Kenny]

Speaking of that, and what was her name, our gal that was running the meeting yesterday? I've already forgotten her name.

[Jay Coles]

Representative Robbins.

[Kenny]

Yeah, Robbins. She said at the outset, the beginning of the meeting that they did invite Governor Walls to yesterday's hearing, and they invited him a long time ago, and they repeatedly invited him. What does this remind you? This reminds you of Ilhan Omar last week? Yeah, she ghosted him and they. He did not respond until yesterday morning.

[Jay Coles]

Yeah. The day of the meeting, he said no, Omar's never responded to him. The governor waited to the morning of the meeting.

[Kenny]

Are we done with fraud? Because I want to shift gears before we get out of here.

[Jay Coles]

I think so. I think, yeah, we've covered it all. I mean, I think it was nice to put all of that into context since all these raids happened. Yeah. Now it's time to say, you know, this goes back a lot farther than anybody realizes.

[Kenny]

And we really work to get Jay on, but, you know, you know, we're going to respect him. He doesn't want to talk to anybody else, but.

[Jay Coles]

Yeah, I mean, sometimes that happens. He just, he's. I can tell you this, he's still nervous and worried.

[Kenny]

I don't blame him. So is Agent X. Yeah. The only one that's not, for some reason is Faye.

[Jay Coles]

Is Faye who still works.

[Kenny]

She's a badass, man. She's got bigger balls than most guys

[Jay Coles]

I know she does because she's still working there.

[Kenny]

She's like, fire me, you ass wife.

[Jay Coles]

Right. Give it a shot. Give it a shot.

[Kenny]

Yeah. Give me your best shot.

[Jay Coles]

Because at least with Agent X. Well, Agent X is still doing that type of work, so I kind of get it with Jay Swanson. He's retired, but he just basically said he's nervous about all of this and he's going to keep it just with government officials and law enforcement for now.

[Kenny]

So we need more like Jay. We really do.

[Jay Coles]

Yeah, all of them. He was great. I mean, I knew. I was told that we should watch that one, and it might be something we'd be interested in, because he was going to say some pretty powerful stuff. And it didn't disappoint. He laid it all right out. I mean, right down to refugee camps in Kenya. Kenny, if people in refugee camps in Kenya know this is going on in the teed, how can the governor of Minnesota not know? See what I'm saying?

[Kenny]

I had no idea what Covid.

[Jay Coles]

We're just.

[Kenny]

I've got Trump to deal with.

[Jay Coles]

We're just generous in Minnesota, and fraud's gonna happen.

[Kenny]

Hey, look, America, I'm a knucklehead, okay? I'm a knucklehead.

[Jay Coles]

But this notion that we're generous and fraud's gonna happen. Oh, I get what he's saying. Yeah. But you were being told that this fraud could be of epic proportions. These were people saying, this isn't your run of the mill. They were saying. And using words, Kenny, like organized crime. Yeah.

[Kenny]

And that's what it is. That's what the pros do.

[Jay Coles]

Yeah.

[Kenny]

This isn't your welfare, only they don't get caught.

[Jay Coles]

Right, Exactly. They were talking about it in refugee camps in Kenya. Yeah. Think about that for a minute. Oh, but none of our leaders were aware. Okay.

[Kenny]

All right. Yeah. All right. It's time to do a dance.

[Jay Coles]

All right. What are we dancing about?

[Kenny]

We talked about Ilhan.

[Jay Coles]

Oh, yeah.

[Kenny]

I can give you extensively last week, and we talked about how

[Gabe]

I got

[Kenny]

to be careful here. What I say, is anything ever going to come of this?

[Jay Coles]

That was pretty much what our show was about. We laid out all the stuff swirling around her. Right.

[Kenny]

And we got a lot of response on that. And people want us to continue down that road. And knowing Jay, you know, pretend Jay's not here for a second. I got to talk to the listeners and the viewers.

[Jay Coles]

Okay?

[Kenny]

He's a pain in the ass. He's got to have more than one or two sources. We got to have proof. We've got to do all the journalistic but it makes us legitimate and believe. Believe you me, we're sitting on something that's just killing me, not talking about it.

[Jay Coles]

Me too.

[Kenny]

But things are being done and stay tuned. We're working on some pretty big Ilhan stories that nobody else knows about to my knowledge, except Coles.

[Jay Coles]

I can tell you one. One of the two things we talked about. I can talk about.

[Kenny]

Be careful. Do the dance.

[Jay Coles]

I'll do the dance. The one thing I cannot yet confirm, and I'll keep working on it, but we should let people know, too. This came from. Because we raised that question in our podcast. How can you have all these things over all these years and nothing seems to be happening? Someone heard our podcast, got in touch with my source, who also happened to have heard the podcast. And the message to my source from this other guy that I don't even know who it is, said, tell Jay and Kenny something's being done and here's what it is. And that I can't reveal it just yet because I gotta get more confirmation. I know.

[Kenny]

I feel like a real whore making these announcements, but I mean, seriously, stay

[Jay Coles]

tuned because if I can get one more confirmation from a source, I'll feel comfortable going with it. But I can tell you.

[Kenny]

Go ahead. No, finish.

[Jay Coles]

I can tell you that I also have a good contact in Washington who. I'll just. Yeah, it's the House Oversight Committee. Okay. The House Oversight Committee started an investigation into Ilhan Omar's finances.

[Kenny]

Right.

[Jay Coles]

Which we talked about at length last week. My source said there's a letter that's kind of key to all this. I'm trying to think of how I can explain it without spilling the beans of who I'm talking to, but. But there's a letter sent from the House Oversight Committee. House Oversight Committee is the oversight of government operations. They sent a letter and I pulled the letter. I got a copy of the letter. They sent a letter to Tim Manette, who is Ilhan Omar's husband. And in that letter, it's about a two page letter. They want financial records for his venture capital firm. They want records for the winery. It was all about her finances. Which, by the way, as we talked about last week, the venture capital firm's gone, the winery's gone, so on and so forth. And that letter went out in February. They got no response from Minette. In March, the chair of the House Oversight Committee sent a letter to the House Ethics Committee saying, here's all our information. We're gonna give it all to you because we investigate oversight of government operations. You guys at Ethics would look into financial misconduct as a code of conduct violation. Ethics violation. So my source at House Oversight said they have it on good authority that the Ethics Committee is now investigating Omar for the financial stuff. So that is kind of interesting too.

[Kenny]

But there's more.

[Jay Coles]

There's more and I can't.

[Kenny]

And that's. Leave it there.

[Jay Coles]

If I can get confirmation, I will. Yeah, we'll be the first ones to put it out there. Boy, I hope I get confirmation, Kenny, but I don't have it yet.

[Kenny]

But are we done? Gabe, anything?

[Gabe]

I actually have two questions I want to leave everybody with.

[Jay Coles]

Okay.

[Kenny]

Yeah.

[Gabe]

How safe do you think that these DHS officials feel to continue to hold their positions even with all the turmoil?

[Jay Coles]

Yeah, great question. I think they feel very safe because they haven't been let go and they know there's a new governor coming in next January and they got plenty of time to look for other work. Cuz the new governor is gonna clean house.

[Kenny]

Even if it's a Democrat? Even if it's Amy.

[Jay Coles]

Yeah. Yeah. That's why Gandhi, the commissioner, said she's done after this, she's gonna retire or do something else. What about they're just biding their time till the new one gets in?

[Kenny]

Isn't her name Kiki Brown?

[Jay Coles]

Kiki Brown. She's the head of. She's the head of the Department of Children, Youth and Families.

[Kenny]

She had some accusations leveled at her yesterday.

[Jay Coles]

Yeah, she did.

[Kenny]

At the end of that meeting.

[Jay Coles]

She did, yeah.

[Kenny]

What's your other question, Gabe?

[Gabe]

The second part, it kind of plays off of that. But how organized and powerful have they made themselves to consistently keep the mouths shut of everybody that knows who and what they did?

[Jay Coles]

Are you talking about the employees?

[Gabe]

Yeah. All of these whistleblowers and these people that keep coming forth saying, this is what happened, this is how I felt, this is my experience. And they all keep saying, these people told me not to do this. We have more sound bites today exclaiming all of that, but those people have put them in a position where they will not say who it is and what they did explicitly because something.

[Jay Coles]

They aren't saying it publicly, but I know they're saying it to investigators privately. And I don't know why the reluctance to say the names publicly is part of it.

[Kenny]

Because they have mortgages and kids in college and bills to pay and food to buy. Is that what in a retirement plan?

[Jay Coles]

I think they're in retirement and I think they're fearful that if they start naming names, they could be subject to litigation. And lawsuits, even though they would be protected under the Whistleblower Act. But still in your head, if you're retired and you're now 67, 68 years old, it's like, oh, I'll tell investigators who these people are. But I ain't saying anything publicly cuz I'm fearful of them coming at me and I just don't want that anymore. That's only if I had to put myself in their shoes. That's the one thing that would maybe keep me from publicly saying the names as long as I know the right people behind the scenes had the names. But I bet I. You know what? I'm going to try to get the name of who I should have worked on that. I could probably get the name of who he was talking about. I should have done that before today's show.

[Kenny]

Dang it. We always have another show coming. We do. And what's our motto? Less work, more glory. Something.

[Jay Coles]

Minimal effort, maximum glory. Remember this memg. Minimal effort, maximum glory.

[Kenny]

Jim, you sit tight there because Gabe and I are about to have an intervention with you regarding what's growing on your face.

[Jay Coles]

Oh, I know. I love it.

[Kenny]

So you stay put there. We're going to talk about that. And thanks to everybody for listening again to the Crabby Coffee Shop. Thank you, Gabe and you, of course, Jay. Thank you.

[Jay Coles]

See you, Kenny.