$18 Billion Fraud Exposed as FBI and ICE Raid 23 Daycare Centers Across Minnesota

At 9:30 a.m. in Brooklyn Park, Minnesota, an unremarkable residential street was suddenly transformed into the center of a federal operation.

Unmarked SUVs pulled into the parking lot of Creative Minds Daycare, a modest stone building that appeared, from the outside, to be just another cheerful childcare center.

Colorful letters decorated the windows.

A small playground sat quietly in the back.

Nothing suggested criminal activity—until federal agents poured out of their vehicles.

FBI, ICE, and U.S. Department of Health and Human Services agents were not there for a routine inspection.

Armed with a court order and months of intelligence, they were executing a coordinated raid that would expose a fraud scheme of almost unimaginable scale.

Inside the daycare, investigators expected noise, children, staff, and signs of daily activity.

Instead, they found silence.

Classrooms were empty.

Toys were dusty.

Cribs were brand new and unused.

The center, licensed to care for nearly 100 children, appeared to have been inactive for months—yet it had received millions in government subsidies.

Creative Minds Daycare alone had collected an estimated $2.45 million in government grants over the past year, despite having been shut down by the state of Minnesota for serious violations.

The operators allegedly kept the money flowing by simply changing the name of the center to “Super Kids” and submitting falsified records supported by stolen identities.

What initially appeared to be a single case of fraud quickly expanded into something far larger.

On the same day as the Creative Minds raid, federal agencies carried out coordinated operations at 23 daycare centers across Minnesota, many allegedly operated by individuals within the same ethnic and business networks.

Investigators soon realized these centers existed largely on paper.

Records showed children enrolled who never attended, staff members who never worked, and services that were never provided.

Despite this, federal and state subsidy payments continued to pour in, unchecked.

As the investigation deepened, authorities uncovered a complex web of shell companies, fake childcare providers, fraudulent housing facilities, and bogus elderly care services.

The estimated value of the fraud ballooned to a staggering $18 billion—money intended to support families, children, seniors, and vulnerable communities.

The methods were sophisticated but relied heavily on one critical weakness: poor oversight.

Fraudsters created ghost businesses, falsified tax filings, and submitted fabricated invoices that were rarely verified.

By spreading the fraud across dozens of entities, they avoided triggering red flags that might have emerged from a single operation receiving massive funds.

Perhaps most alarming was the expansion of the scam beyond daycare services.

Investigators discovered that housing and senior care facilities were also being used as fronts.

In Brooklyn Park, a city of just 84,000 residents, authorities found 181 registered housing care facilities—more than double the number in St.

Paul, a city nearly four times larger.

Many of these “facilities” were ordinary homes.

Elderly residents and immigrants living inside them were often unaware their addresses had been registered as care centers to collect government subsidies.

No services were provided, yet payments continued.

The fraud also extended into federal pandemic relief programs.

Shell companies successfully applied for Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL), receiving funds meant to keep workers employed and businesses alive.

Instead, investigators found that much of the money was used to purchase luxury homes, expensive vehicles, and other personal assets.

In total, authorities identified nearly 7,900 fraudulent loans amounting to approximately $400 million granted to businesses that existed only on paper.

When questioned, operators behind some of the daycare centers offered explanations that stunned investigators.

One claimed that just one day before federal authorities requested records, thieves broke into the daycare by smashing through a wall connected to a nearby store—and stole only enrollment paperwork.

No cash.

No computers.

No electronics.

Just documents.

To agents, the story was not just implausible—it reflected arrogance.

The perpetrators appeared confident that the system was too weak, too disorganized, or too overwhelmed to ever hold them accountable.

That confidence, investigators say, was not entirely misplaced.

For years, these operations thrived because verification systems failed, agencies did not communicate effectively, and red flags were ignored or buried under bureaucracy.

What this case ultimately revealed was not just criminal greed, but systemic vulnerability.

Programs designed to help society’s most vulnerable were turned into pipelines for organized fraud.

The $18 billion siphoned away could have funded hospitals, schools, housing, and childcare for millions of Americans.

As federal agencies continue to widen the investigation, the case has become a wake-up call.

It raises uncomfortable questions about accountability, transparency, and whether current oversight mechanisms are capable of stopping large-scale fraud before it spirals out of control.

This was not a loophole accidentally discovered.

It was a system deliberately exploited—until the doors finally came crashing open.