Bessent calls Minnesota ‘genesis’ of nationwide anti-fraud rollout
Treasury Secretary Scott Bessent said Minnesota will serve as the “genesis” for a broader federal rollout of anti-fraud protocols as the government expands investigations into alleged large-scale fraud. He announced that FinCEN has notified money services businesses they are under active investigation for possibly transferring taxpayer funds overseas, including to regions in the Middle East and East Africa, and that some stolen funds may have been diverted to al Shabaab. The probe focuses on alleged schemes tied to MinnesotaS Somali community involving nonprofits, child care funds, and Medicaid, with authorities estimating about $300 million was stolen. The Treasury has issued a geographic targeting order requiring extra reporting on overseas transfers and will train Minnesota law enforcement to better use financial data and suspicious activity reports. Bessent said the Minnesota measures will be used as a model for investigations in other states and criticized Gov. Tim Walz for failing to address the fraud.
Bessent calls Minnesota ‘genesis’ of nationwide rollout for anti-fraud protocols
Treasury Secretary Scott Bessent said on Friday that Minnesota is just the beginning of the federal government’s efforts to combat fraud, confirming that other states will eventually fall under a similar investigation.
“President Trump wants accountability. I want accountability. The American people want accountability, and they will get accountability,” Bessent told reporters on a live video feed recorded in Minneapolis on Friday. “That is why I’m announcing several initiatives Treasury is taking to target fraud here in Minnesota, and the Minnesota protocols will serve as a genesis and a launching pad for investigations into other states.”
Providing an update to his department’s work in uncovering the extent of Minnesota’s fraud scandal, the secretary said the Financial Crimes Enforcement Network has notified money services businesses that they are under active investigation. He added that the businesses “may have transferred taxpayer funds overseas” from Minnesota to the Middle East or East Africa, where Somalia is located.
The stolen money has allegedly been diverted to al Shabaab, an al Qaeda-affiliated terrorist group based in Somalia.
Bessent first announced last month that the Treasury Department is looking into money services businesses amid the Trump administration’s widening crackdown on allegations of fraud. He declined to name the businesses at this time but indicated that information would be made public in the future.
Minnesota’s Somali community is under federal scrutiny as reports indicate it is linked to alleged fraud schemes concerning the state’s nonprofit groups, child care funds, and Medicaid programs.
The Treasury is one of many federal entities that sent personnel to the Minneapolis-St. Paul area to investigate the matter.
Among the Treasury’s actions that Bessent disclosed on Friday is a geographic targeting order issued by FinCEN that requires banks and money transmitters to report additional information about funds transferred overseas. The Treasury will also provide training to Minnesota law enforcement on how to use financial data, including suspicious activity reports, to better combat fraud schemes.
“Fraudsters in Minnesota stole at least $300 million meant for children in need, and we must prevent fraud of this scale from occurring in the future,” Bessent said.
The Trump administration official also attacked Gov. Tim Walz (D-MN), accusing him of “incompetence” and “negligence” for failing to combat fraud himself. Walz dropped his reelection bid this week due to his handling of fraud, but he refuses to resign from office.
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