Minnesota GOP blasts inaction after years of daycare fraud warnings

Nearly nine months after allegations of widespread daycare fraud first emerged in Minnesota, state Republicans are criticizing Democrats for inaction as newly-released court records show officials received early warnings in at least one case. House Speaker Lisa Demuth, R-Cold Spring, said Minnesota Democrats have perpetuated a "culture of fraud." "The culture of fraud perpetuated by the Walz Administration has allowed nearly a decade of inaction in the face of numerous reports of fraudulent activity in just this one location. We are far past accusations of negligence—this is complicity," Demuth said. "Every single Walz Administration official who has allowed this fraud to continue must be held accountable, and the fraud they've enabled will be rooted out everywhere it exists. The rot in the Walz Administration must end." This comes as state media is reporting that one St. Paul daycare received nearly $12 million in taxpayer funds over nearly a decade, despite red flags as early as 2018. "State officials knew this daycare looked like a scam back in 2018, and yet, it still took eight years and nearly $12 million in stolen tax dollars before the Walz Administration finally turned off the money," said House GOP Leader Harry Niska, R-Ramsey. "That's not just incompetence, it's a clear pattern of ignoring red flags and choosing to look the other way while crimes were being committed." This is according to court records related to Diamond Daycare. The daycare is no longer listed as active on the Minnesota Department of Human Services licensing database, though another daycare, Champion Child Care LLC, is now listed at the same location. It faced scrutiny following reports of an empty building and altered documents while receiving millions of dollars in taxpayer funding. Some of those concerns were first raised in 2018, though funding continued until it closed earlier this year. "Almost $12 million of your tax dollars to a daycare that had almost no children," said Minnesota Senate Republicans on social media on Thursday. Just from July 1, 2025 through Dec. 31, 2025, it received $1.18 million. This story is eerily similar to the one that first brought Minnesota fraud into the national spotlight, when YouTuber Nick Shirley posted a viral video in December claiming to have uncovered $110 million in fraud at child care centers across the state. Since then, both state and federal officials have been investigating the allegations. In April, federal agents raided more than 20 locations in the Minneapolis area, including several childcare centers, and seized records. While dozens are facing charges for their involvement in fraud, there are no charges yet filed in the Diamond Daycare case. Republicans say more needs to be done to address the years of negligence from state officials. "Democrats can make all the election-year promises they want, but actions speak louder than their campaign talking points," Niska said. "For years, their actions have enabled and protected fraudsters."