Trump Announces Federal Fraud Investigation Into CA After Minnesota Scandal
President Donald Trump announced Tuesday that a federal investigation into alleged fraud in California has begun, signaling a widening crackdown after similar revelations of systemic abuse in Minnesota’s state-run childcare programs.
“California, under Governor Gavin Newscum, is more corrupt than Minnesota, if that’s possible,” Trump wrote on Truth Social, using a mocking version of Gov. Gavin Newsom’s name. “The fraud investigation of California has begun.”
Trump did not immediately provide details about the scope of the California probe, but the declaration comes less than 24 hours after his administration froze all federal childcare payments to Minnesota amid reports that Somali-run daycare and healthcare operators stole more than $9 billion in taxpayer funds.
The president’s new statement marks the first time California has been formally linked to the widening federal effort to track down fraudulent spending in social programs. His comments follow a series of public warnings to Democratic governors he accuses of mismanaging state welfare systems.
“Tim Walz destroyed Minnesota,” Trump said Monday, “but Newsom, Pritzker, and Hochul have done, in my opinion, an even more dishonest and incompetent job.
Federal officials have not released specifics of the California case, though multiple law enforcement and oversight agencies have been mobilized in recent days following the Health and Human Services Department’s announcement of a nationwide anti-fraud sweep.
HHS Deputy Secretary Jim O’Neill confirmed Tuesday that the agency has “turned off the money spigot” to Minnesota and imposed new nationwide verification measures to prevent further abuse of taxpayer funds.
“You have probably read the serious allegations that the state of Minnesota has funneled millions of taxpayer dollars to fraudulent daycares across Minnesota over the past decade,” O’Neill said. “Today we have taken three actions against the blatant fraud that appears to be rampant in Minnesota and across the country.”
Under the new HHS directives:
All federal childcare payments will now require receipts or photo evidence before funds are released to a state.
Individuals identified in investigative journalist Nick Shirley’s viral video — which captured empty daycare centers receiving millions in public money — have been flagged for full audits.
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A dedicated fraud-reporting hotline and email system has been launched through ChildCare.gov
for parents and whistleblowers.“We have turned off the money spigot and we are finding the fraud,” O’Neill declared.
The announcement follows a dramatic escalation in Minnesota, where Homeland Security Investigations (HSI) agents began door-to-door raids in Minneapolis on Monday targeting businesses suspected of laundering welfare funds through fake childcare centers and health programs.
“Homeland Security Investigations @ICEgov are on the ground in Minneapolis right now conducting a massive investigation on childcare and other rampant fraud,” DHS Chief Kristi Noem confirmed in a post on X. “More coming.”
The coordinated response comes after Shirley’s footage from Minneapolis’s “Quality Learning Center” — which appeared virtually empty despite receiving millions in public funds — went viral last week, prompting widespread outrage and bipartisan calls for accountability.
In the video, a woman at the facility shouted, “Don’t open up! It’s ICE!” after being approached by investigators. The center’s sign misspelled “learning” as “learing,” a detail that became emblematic of the alleged scheme’s brazenness.
Federal audits later found that the daycare and several similar facilities had received large sums despite repeated state violations and minimal oversight from Gov. Tim Walz’s administration.
Officials say the Minnesota scandal, potentially the largest case of welfare fraud in U.S. history, may have diverted as much as $9 billion in federal and state funds — some of which authorities believe was funneled abroad to terrorist-linked networks in Somalia.
Trump’s decision to link California to the expanding investigation reflects growing concern that similar networks may be operating in other blue states with lax oversight and massive welfare budgets.
“California has a long history of corruption in its social spending programs,” said one senior administration official speaking on background. “The president is making it clear that this investigation won’t stop with Minnesota.”
Trump Warns Iran of ‘Total Obliteration’ if They Try To Harm Him HH
President Donald Trump warned Iran that continued assassination threats made by leaders in Tehran would be met with the country getting “blown up” and “total obliteration.”
“Well, they shouldn’t be doing it but I’ve left notification,” Trump said. “Anything ever happens, we’re going to blow the whole — the whole country’s going to get blown up.”
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Biden-era Intelligence officials briefed Trump about the alleged threats against him during his presidential campaign in 2024. Former Attorney General Merrick Garland said the plot was retaliation for the killing of Iranian Gen. Qassem Soleimani by the U.S. in 2020, during Trump’s first administration.
Despite being briefed by his administration, Trump on Tuesday said President Biden “should have said something” on the matter, adding that presidents should defend each other on such matters.
“But I have very firm instructions,” Trump continued. “Anything happens, they’re going to wipe them off the face of this earth.”
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Trump also spoke about the ongoing negotiations between the United States and Iran in Geneva.
“What are you expecting from these Iran talks in Geneva?” a reporter asked Trump aboard Air Force One.
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“So, I’ll be involved in those talks indirectly, and they’ll be very important. We’ll see what can happen. Typically, Iran’s a very tough negotiator; they’re good negotiators — or bad negotiators. I would say they’re bad negotiators because we could have had a deal instead of sending the B2s to knock out their nuclear potential. We had to send the B2s. I hope they’re going to be more reasonable. They want to make a deal,” Trump said.
“Have you been told that a deal is next to impossible?” the reporter followed up.
Trump replied, “No. I think they want to make a deal. I don’t think they want the consequences of not making a deal. They want to make a deal.”
WATCH:
Trump previously said that he instructed officials to destroy Iran if they killed him.
The president said this after signing an executive order right after taking office that gave him all the tools he needed to talk to Iran’s government and put as much pressure on Tehran as possible.
“They haven’t done that and that would be a terrible thing for them to do,” Trump said at the time. “Not because of me — if they did that, they would be obliterated. That would be the end. I’ve left instructions, if they do it, they get obliterated, there won’t be anything left. And, they shouldn’t be able to do it.”
Trump warned last week that the United States could send additional warships toward Iran if ongoing diplomatic negotiations fail to produce a deal, signaling that military pressure could increase as talks over Tehran’s nuclear program stall.
In remarks to Axios, Trump said the administration is considering deploying a second aircraft carrier strike group to the region in addition to the USS Abraham Lincoln and 9 additional warships already positioned near Iran, though he expressed hope that a diplomatic agreement can still be reached.
“Either we will make a deal or we will have to do something very tough like last time,” the president told Axios on Tuesday, a reference to the bombing of three Iranian nuclear sites in June.
“Last time they didn’t believe I would do it. They overplayed their hand,” Trump added. “We have an armada that is heading there and another one might be going.”
The president emphasized that the United States is seeking to persuade Iran to curb its nuclear ambitions, halt the development of its ballistic missile program, and end support for militant proxy groups. Iranian officials have so far resisted expanding negotiations beyond nuclear-related issues.
He described the nuclear issue as a “matter of course” part of any negotiation, but also insisted that an agreement with Iran must also address Tehran’s ballistic missile stockpiles, per Axios.
Trump said the US “can make a great deal with Iran,” and Tehran “very much wants to make a deal.”
Trump’s comments came ahead of a planned visit to Washington, D.C. by Benjamin Netanyahu, who is expected to press for a tougher U.S. stance and broader terms for any Iran deal that would include constraints on Tehran’s missile capabilities and regional activities.
Before heading to DC, the Israeli leader previewed some of what he and Trump were going to discuss.
“I will present to the president our understanding of the principles of the negotiations (with Iran) – the essential principles that are important not only to Israel – but to everyone who wants peace and security in the Middle East,” Netanyahu told reporters, per the New York Post.
The administration has already bolstered its military presence in the Middle East, with multiple warships and aircraft deployed as a means of deterrence and leverage.
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