MINNESOTA DAYCARE OWNER WHO RECEIVED $3.7 MILLION IN STATE FUNDS PLEADS GUILTY TO $5.4 MILLION FRAUD SCHEME. (PHOTO).

Minnesota daycare owner who received $3.7 million in state funds pleads guilty to $5.4 million fraud scheme

  Two Minnesota daycare operators have pleaded guilty in fraud cases involving millions of dollars in taxpayer-funded programs, marking the first convictions tied to a growing controversy over childcare assistance fraud in the state.

Fahima Mahamud, 50, who operated Future Leaders Early Learning Center, admitted to defrauding the state’s childcare assistance program of $4.6 million. The daycare received $3.7 million in childcare assistance funds in 2025, the highest amount awarded to any provider in the state that year.

Mahamud was arrested in February after closing her daycare and booking a flight to London on the same day. Prosecutors did not accuse her of falsifying attendance records, but she admitted to failing to collect required copayments from enrolled families. Investigators argued that the arrangement allowed families to receive free childcare while the daycare continued collecting government payments.

In addition to the childcare fraud, Mahamud also pleaded guilty to taking about $850,000 through the Feeding Our Future meal program.

Another daycare operator, 43-year-old Jillaine Mertens, also pleaded guilty Thursday to fraud charges involving approximately $426,000. Both Mahamud and Mertens are scheduled to be sentenced at a later date.