A former investigator with Minnesota’s Department of Human Services testified this week that state officials attempted to suppress evidence of fraud in a taxpayer-funded childcare program as federal authorities intensify their probe into alleged public funds abuse.
Jay Swanson, who previously conducted criminal investigations into childcare providers, told a Minnesota House Oversight Committee on Tuesday that his superiors pressured him to alter or withhold findings related to fraudulent billing practices. Swanson stated the directives arose after he responded to a legislative inquiry into suspected fraud within the state’s Child Care Assistance Program. He said: “I then advised this official that I believed what they were telling me to do was illegal.”
Swanson also alleged he was instructed to delete investigative findings, describing the request as unlawful and part of a broader effort to limit scrutiny of potential fraud cases. He further testified that “members of our unit were harassed and bullied by DHS officials” while pursuing investigations into suspected wrongdoing.
The testimony coincides with federal authorities executing search warrants at more than 20 childcare centers and related businesses in Minneapolis under an ongoing investigation targeting providers suspected of misusing public funds tied to childcare, Medicaid, and other assistance programs. The raids are part of a crackdown that has already led to dozens of criminal charges and convictions for fraudulent claims in government-funded services, including pandemic-era programs.
Federal officials note the probe remains active with multiple agencies collaborating closely with state and local law enforcement. Swanson told lawmakers that fraud schemes in Minnesota’s childcare system were widely known across the U.S., adding: “They had heard you could run the scam in a number of different states, but it was easiest and you could make the most money doing it in Minnesota.”
The allegations have intensified political scrutiny of Democratic Gov. Tim Walz’s administration, particularly from Republican lawmakers who claim oversight mechanisms were weakened in recent years. During the hearing, Republican state Rep. Kristin Robbins noted internal watchdog functions were curtailed, limiting investigators’ authority to pursue fraud cases. Swanson testified that support for his investigative unit declined over time, ultimately leading to its dismantling—a move he said hindered efforts to detect and prosecute fraud.
The controversy follows years of mounting concerns about fraud in Minnesota’s publicly funded programs, including the “Feeding Our Future” case, where prosecutors alleged hundreds of millions were stolen through false meal claims during the COVID-19 pandemic. Federal officials estimate billions may have been improperly claimed across state-administered programs since 2018. Gov. Walz has defended his administration’s handling by emphasizing cooperation with federal authorities and steps to strengthen oversight, including audits and anti-fraud initiatives. State officials stress joint investigations remain critical for holding offenders accountable as the probe continues.
