Modern Wisdom #1044 - Nick Shirley: Inside Minnesota's $10B Childcare Fraud Scandal

Date: January 10, 2026
Host: Chris Williamson
Guest: Nick Shirley

Episode Overview

In this explosive episode, Chris Williamson interviews Nick Shirley, the independent journalist behind the viral exposé uncovering a massive $10 billion fraud in Minnesota’s welfare and childcare system. Shirley details how a network of fraudulent daycare and welfare businesses—primarily operated by Somalian immigrants—exploited government systems, and how the story’s national attention has triggered sweeping investigations, political fallout, and threats to his safety. The episode explores the mechanics of the fraud, the hesitancy of legacy media, government accountability, and the personal toll of whistleblowing, all delivered in Nick’s revealing and dynamic first-hand narrative.

Key Discussion Points & Insights

1. The Viral Exposé and Immediate Fallout

• Nick Shirley’s investigative video went viral, reaching over 100 million views in 72 hours.

  • [00:33] “Within just one day of me posting my video…it got over 100 million views in 72 hours… It’s the most viral video, the expose on fraud in Minnesota…by anybody not named Mr. Beast in an expose format.” (Nick Shirley)

• High-level political and internet attention:

  • Multiple major political figures and public personalities including Elon Musk, J.D. Vance, and Pam Bondi shared or commented on the video.

• Impact on Minnesota politics:

  • Governor Tim Walz dropped out of his reelection campaign following allegations he allowed or ignored the fraud.
  • [01:20] “I did end Tim Waltz. He is no longer running for re election of governor.” (Nick Shirley)

2. How the Fraud Worked: Mechanics and Scale

• Fraudulent Businesses

  • Hundreds of daycares, adult daycares, autistic centers, and transportation companies created, many with little to no real service or actual clients.
  • Most were unstaffed, with “businesses” operating in empty, poorly maintained buildings.

• Methodology:

  • The Department of Human Services (DHS), through the Childcare Assistance Program (CCAP), distributed funds based on self-reported numbers of children/adults served.
  • Businesses would claim the maximum number of clients (children/adults), receive government funds, and not deliver actual services.

• Examples from Shirley’s Investigation:

  • [06:51] “The first daycare we go to…had both been receiving money from the government, upwards of $5 million…all the windows were blacked out…nobody would answer.”
  • [08:33] “It’s still not 40 [children present]. So what’s the point of giving them a million dollars? So I believe that’s fraudulent.”

• Wider Systemic Abuse:

  • Massive hikes in funds for autism centers (from $1 million in 2017 to $200 million in 2024).
  • Adult daycare and “non-emergency medical transportation” (NEMT) schemes that logged fictitious trips to justify inflated reimbursement.
  • [71:03] “Safari transportation took Mohammed to the doctor…it makes it a lot harder to kind of prove that something fishy is going on.”

3. Demographic and Political Context

• Somalian Community’s Role and Political Sensitivity

  • Concentrated Somali immigrant/refugee population in Minneapolis, heavily targeted by local politicians for votes.
  • 81% of Somalian Minnesotans on welfare; 89% of fraud attributed to Somalians.
  • Political correctness stifled early whistleblowing—critics were labeled racist or xenophobic.
  • [13:05] “But they go into certain areas and they pretty much move out any other race or religion, and it just becomes a Somalian area…Politicians…started panhandling to this group of immigrants, one for votes…they attached onto welfare programs.”

• Political Reaction & Accountability

  • Both Democrats and Republicans implicated—lack of adequate oversight and action.
  • Shirley asserts “the buck stops” with Governor Walz, who had repeatedly promised to fight fraud.
  • [03:25] “He said it himself. The buck stops with him. He said that multiple times, and he’s known about the fraud forever.”

4. National & Legal Consequences

• Federal Response

  • Massive surge of federal and ICE agents to Minnesota; all childcare funding temporarily frozen until providers prove legitimacy.
  • As of recording, no business has provided legitimate proof to reinstate funds:
    • [32:26] “To this day, time of this recording, no businesses have submitted to prove legitimacy.” (Nick Shirley)

• Cash-back International Ties

  • Some of the fraudulent proceeds funneled out of the US, even linked to terrorist organizations in Somalia.
    • [23:12] “Some of that money has been traced back to go back to the Al Shabaab…millions of dollars, hundreds of thousands of dollars in cash going through TSA…”

• Legislative Impact

  • Breaking news live on the show: Proposed creation of a new Assistant Attorney General role for nationwide anti-fraud enforcement, starting in Minnesota.
    • [89:27] “J.D. Vance announces the Trump administration will create a new Assistant Attorney General position who will have nationwide jurisdiction over the issue of fraud, focusing first primarily in Minnesota and then expanding nationwide.”

5. Media Coverage, Public Perception, and Personal Risk

• Mainstream Press Reaction

  • Media tried to debunk Shirley’s story, focused on his background rather than the fraud.
    • [51:18] “They tried to come in and debunk my whole entire story. They couldn’t do it because it was true. And they labeled me as a MAGA, YouTuber, conservative, right wing journalist.”
  • Shirley claims both legacy and independent media have biases, but he tried to give all sides a voice in his reporting.

• Personal and Security Fallout

  • Shirley describes rapid escalation in notoriety, security threats, and needing around-the-clock protection due to death threats and doxing.
    • [59:57] “Somebody sent me a photo…in a ditch dead. And they said, this will be you… It just sucks…you’re doing something to the point where they want to kill you.”

• Impact on Future Work

  • Increased attention has made investigative fieldwork more dangerous and complex. Shirley expresses intention to delegate, enhance vetting, and continue fraud reporting—in Minnesota and nationally.

Notable Quotes & Memorable Moments

• [01:20] On political impact:
  “I did end Tim Waltz. He is no longer running for re election of governor.” – Nick Shirley

• [04:14] On discovering the story:
  “Back last June, I went to Minnesota to make a video about the rise of Islam…while I’m there, I’m talking with locals and they’re like, nick, you have to do a video on the fraud…”

• [13:05] On demographic shifts and political correctness:
  “They pretty much move out any other race or religion, and it just becomes a Somalian area…If you come out and speak against the fraud, you’ll be called the white supremacist, like Tim Waltz did with me.”

• [17:25] On systemic government failure:
  “If someone’s stealing $100,000, a million dollars from your bank account, how fast are you gonna find out? Pretty quick. And Tim Waltz has been saying they’ve been fighting fraud since 2019. And so six years later, he’s been enabling fraud.”

• [32:26] On accountability:
  “To this day, time of this recording, no businesses have submitted to prove legitimacy.” – Nick Shirley

• [41:22] On political correctness:
  “Politicians…are afraid of being politically correct and calling things out for what they are. And so I think that kind of helped cultivate that fraud and enable it to continue.”

• [44:39] On the proceeds of fraud:
  “The lady who got caught for feeding our future scam, that was a $250 million fraud scam. She was driving around a Porsche.”

• [53:16] On press competitiveness:
  “They have thousands of employees. I have me and myself and your mom. My mom. And that’s pretty much it…we just did over 100 million views on an expose that they should have covered as well, but instead they come after me.”

• [89:27] Breaking news (J.D. Vance):
  “We are creating a new Assistant Attorney General position who will have nationwide jurisdiction over the issue of fraud.”

• [91:28] On impact:
  “It’s a complete result of my video showing that fraud’s taking place to the point where the Vice President…needs to create a new role for Assistant Attorney General to go after fraud.”

Timestamps for Important Segments

• 00:33 — The viral video goes live; how the story exploded.
• 04:14 — Nick’s original motivation, interviews, and how locals directed him to the fraud.
• 06:51 / 07:37 — Visiting suspect daycares; red flags and lack of transparency.
• 13:05 — Discussion of demographic concentration, welfare dependence, and political effects.
• 17:25 — How government oversight failed; Nick explains bureaucratic passivity.
• 21:36 — The theorized interplay of cash, multiple wives, and welfare benefits.
• 23:12 — How fraud funds are exported abroad—links to terrorism.
• 32:26 — Aftermath: Funding frozen, and no legitimate proof returned by providers.
• 41:22 — Why fraud continued: fear of being labeled racist or xenophobic.
• 59:57 — Shirley’s safety: death threats, doxing, and the cost of whistleblowing.
• 83:25 — What’s next: upcoming investigations and future plans.
• 89:27 — Breaking news: new federal position announced live on the podcast.

Final Reflections & Advice

• Advice from Chris ([94:15])
  “I think you need to try and delegate as quickly as possible in order to allow you to keep doing the thing that you’re the best at…what you could do with is an assistant who is just with you at all times…” – Chris Williamson

• Nick’s Mission ([87:05])
  “Helping more people come to sense on common sense matters such as fraud, providing and creating real change within the country…”

Key Takeaways

• Nick Shirley’s high-impact investigative YouTube work catalyzed national and political action against fraud in a way that traditional journalism had not.
• Governmental systems for childcare and welfare are highly susceptible to abuse through systemic loopholes and weak oversight.
• Political correctness and fear of social backlash contributed to both the perpetuation and delayed exposure of the fraud.
• Personal risk for whistleblowers and citizen journalists is real and significant, especially when challenging powerful financial interests.
• There is a rising rivalry (and interdependency) between independent/online journalism and the mainstream press, with shifting dynamics in audience trust and story influence.

Where to Follow Nick Shirley

• YouTube, X (Twitter), and Instagram: @Nick Shirley

For listeners curious about the intricate mechanics of large-scale government fraud, the realpolitik of American immigrant communities, and how one viral video can upend a state’s political landscape, this episode is an unmissable deep dive.