ICE returns to labor enforcement in wake of Minnesota public funds scandal

Immigration and Customs Enforcement (ICE ) has taken back workplace enforcement with a vengeance, in a relevant federal policy shift following the outbreak of a scandal over fraud with public funds in the state of Minnesota. The decision marks a change of tone within the Trump administration, which for much of 2025 had avoided highlighting such operations in the face of criticism generated by labor raids.

In early December, the local federal prosecutor's office had charged six people and obtained a guilty plea as part of these investigations. However, the scope of the case is considerably larger. In a more recent balance sheet, Attorney General Pam Bondi reported that, to date, 98 people have been charged and more than 60 have pleaded guilty, in an investigation that has been ongoing for several months and will continue with further prosecutions.

The case gained public notoriety following the broadcast of a viral video by youtuber Nick Shirley, who claimed that multiple daycare centers in the area were operating fraudulently.The allegations were quickly amplified by federal authorities. The secretary of homeland security,Kristi Noem, and the director of the FBI, Kash Patel, reacted publicly, reinforcing the idea that taxpayer-funded fraud will be treated as a federal priority.

In parallel, the Department of Homeland Security (DHS) began releasing videos of operations conducted by Homeland Security Investigations (HSI), the investigative arm of ICE, showing inspections at various commercial establishments in Minnesota. According to DHS, these actions seek to combat "rampant fraud" affecting the state and ensure that public resources do not end up funding illegal activities.

The inspections include formal labor audits, such as verification of I-9 forms - used to check employees' work eligibility - and inquiries about the use of E-Verify, the federal system for confirming work authorization. According to local organizations, numerous companies have already received subpoenas to turn in documentation.

Meanwhile, the government insists that investigations will continue to identify, arrest and remove those who defraud the state. A DHS spokesman told Axios that "The American people deserve answers on how their taxpayer money is being used and ARRESTS when abuse is found."