White House Press Secretary Karoline Leavitt delivered a blunt warning on New Year’s Eve regarding the escalating fraud investigation in Minnesota, declaring that “people will be in handcuffs” as federal agencies descend on the state.
Appearing on Fox & Friends Wednesday morning, Leavitt addressed the Department of Health and Human Services’ decision to pause $185 million in annual childcare payments to Minnesota. The freeze comes amid allegations of widespread fraud that Leavitt blamed squarely on Governor Tim Walz, whom she described as “completely incompetent.”
“This is a top priority for the administration,” Leavitt told the hosts. “The Department of Justice as we speak is continuing to execute search warrants and subpoenas. People will be in handcuffs as a result of the fraud that Governor Walz has allowed to occur for many, many years.”
READ: Minnesota Day Care Listing Leads to Governor Walz’s Office, Sparking Oversight Questions
The investigation has reportedly intensified following viral reporting by journalist Nick Shirley, whom Leavitt credited with bringing the issue to national attention. The federal response appears to be a “whole of government” effort, according to the Press Secretary. She confirmed that the Department of Homeland Security is conducting door-to-door investigations and that the administration is not ruling out denaturalization for those convicted.
“We’re also not afraid to use denaturalization,” Leavitt said, specifically addressing a question about Somali nationals potentially involved in the scheme. “It’s a tool at the president and the secretary of state’s disposal.”
Leavitt pushed back against Governor Walz’s claims that the investigation is a political “long game” by the Trump administration to defund state programs. Instead, she pointed to a broader crackdown that could soon expand to other states, mentioning California, New York, and Ohio as potential targets for similar scrutiny.
READ: Spigot Shut: Feds Freeze Minnesota Childcare Cash In Fraud Crackdown; Walz Fires Back
A ‘Historic’ Year in Review
Beyond the unfolding scandal in the Midwest, Leavitt used the appearance to take a victory lap for the Trump administration’s first year back in the White House. With 2026 on the horizon, she touted a list of what she called “historic accomplishments.”
Leavitt highlighted economic indicators, claiming core inflation has hit a five-year low and predicting an “economic boom” in the coming year as tax cuts signed in 2025 take full effect.
“Hardworking Americans will start to see that money going back into their pockets,” she said.
The press secretary also pointed to the administration’s hardline stance on immigration, asserting that the border remains “shut” and that mass deportations will continue. On the international stage, she credited the President with brokering peace in volatile regions involving Israel and Iran.
Looking ahead to the midterm election year, Leavitt signaled that the White House has no intention of slowing down. She mentioned President Trump’s desire to eliminate the filibuster to allow Republicans to “play tough and smart” in passing legislation.
“The best is yet to come in 2026,” Leavitt predicted.
On a lighter personal note, the segment concluded with congratulations for Leavitt, who announced she is expecting her second child, a girl, this summer. She praised the “pro-family working environment” at the White House, noting that many of her colleagues are raising young families while serving in the administration.
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