Senate Investigation Uncovers Fraudulent Loans at Minnesota Daycare
WASHINGTON — A recent Senate inquiry has revealed that the scammers behind the infamous Quality Learning Center daycare in Minnesota managed to obtain nearly $250,000 in Small Business Administration loans during the pandemic.
This daycare gained notoriety last year, becoming emblematic of widespread fraud, especially after YouTuber Nick Shirley filmed a viral video there, despite an incorrect spelling of its name and a nearly empty parking lot.
Although the center closed its doors in January, it received around $1.9 million from Minnesota’s Child Care Assistance Program last year and has collected close to $10 million in state funding since 2019.
Senator Joni Ernst (R-Iowa) has been investigating the federal aid that the facility accessed from the Small Business Administration in April and May of 2020, during the early days of the Trump administration.
The funds were intended to cover salaries, rent, and other costs during the daycare’s COVID-19-related closure. However, Ernst’s investigation seeks clarity on how exactly these funds were utilized. While records confirm that loans were issued and later forgiven, details on the actual expenditures appear to be missing, according to individuals familiar with the situation.
If findings show that funds were misused, federal authorities could initiate punitive actions, including criminal inquiries.
“The fraudsters who operated ‘Learning Centers’ were not isolated cases,” Ernst remarked in a letter directed to the SBA’s Office of Inspector General. “They exploited programs designed to assist hard-working Americans during the pandemic, pocketing nearly $250,000.”
This incident, alongside other fraud allegations tied to Medicaid in Ohio, is part of 28 cases that the Senate’s oversight director is asking the SBA’s watchdog agency to investigate.
The SBA records show the correct name, Quality Learning Center, and indicate that the center received a total of $231,472 from the agency, which included $215,645 in loans from April to May 2020, all noted as forgiven.
“Americans expect their tax dollars to be utilized wisely, not funneled into criminal operations,” Ernst declared. “I want to send a clear message to anyone contemplating the exploitation of taxpayers: engage in corruption, and you’ll find yourself facing serious consequences.”
In response to the attention garnered by Shirley’s video, SBA Administrator Kelly Loeffler announced a pause on $5.5 million in annual funding to Minnesota pending further examination.
The SBA has identified about 13,600 COVID-19-era Paycheck Protection Program loans across states, totaling $430 million, that raise red flags for fraud. This includes $3 million linked to the “Feeding Our Future” fraud scandal that severely impacted the state.
Prior to the viral video, federal authorities had already charged numerous individuals in relation to the scandal, with around 65 convictions reported.
The situation in Minnesota has triggered a wider national investigation into fraudulent activities concerning taxpayer dollars within various social welfare programs, including a sham hospice in Los Angeles.
In light of these ongoing issues, President Trump has appointed Vice President J.D. Vance to lead a White House Task Force aimed at combating fraud. Vance recently urged all states to enhance their efforts against fraud in Medicaid systems or risk facing cuts in funding.
