Treasury targeting money services for Minnesota Somali fraud
Treasury Secretary scott Bessent announced increased financial reporting requirements targeting money services businesses to combat a fraud scandal involving Minnesota’s Somali community.The Treasury Department will issue a geographic targeting order to enhance monitoring of funds, especially those sent to Somalia, suspected of being funneled to al shabaab, an al qaeda-affiliated terrorist group. This move intensifies investigations into widespread fraud within Minnesota’s social services system. The inquiry began in early December after President Donald Trump criticized Governor Tim Walz for allegedly allowing Somali nationals to turn minnesota into a hub for money laundering. Walz, however, has expressed openness to more Somali immigrants. The fraud,described by Bessent as “egregious,” has cost taxpayers hundreds of millions of dollars. Both FinCEN and the IRS will investigate suspicious money services businesses, with the management pledging to fully uncover and end the fraud ring.
Treasury targeting money services businesses for Minnesota Somali fraud, Bessent says
Treasury Secretary Scott Bessent announced on Friday his department is boosting its financial reporting requirements for money services businesses to further crack down on a fraud scandal implicating Minnesota‘s Somali community.
The Treasury Department will be issuing a geographic targeting order to ensure any illicit activity is reported to the Financial Crimes Enforcement Network, Bessent said on X.
“This will empower investigators to develop additional leads through increased scrutiny on funds going to areas of concern, such as Somalia,” he added.
The new order shows the Trump administration is ramping up its investigation into widespread claims of financial fraud involving Minnesota’s social services system. The stolen money has allegedly been siphoned by al Shabaab, an al Qaeda-affiliated terrorist group based in Somalia.
Bessent opened the investigation at the start of December as President Donald Trump blamed Gov. Tim Walz (D-MN) for letting Somali nationals take over the state and turn it into a “hub of fraudulent money laundering activity.”
Despite federal pressure, Walz said he would “welcome more” Somali natives to Minnesota.
The governor is facing intense scrutiny over his administration’s handling of the massive fraud scheme. Late last month, some employees at Minnesota’s Department of Human Services laid full responsibility on Walz for failing to prevent fraud and accused him of “systematically” silencing whistleblowers who warned of fraud occurring under his watch.
Regarding the Treasury’s investigation, Bessent called out the “egregious fraud” that has cost hundreds of millions of taxpayer dollars, including funds sent to Somalia through money services businesses instead of banks.
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Bessent noted department personnel are trying to “uncover the facts” and that FinCEN will be sending notices of investigations to money services businesses of concern. The IRS will also be probing the businesses.
“Under President Trump, we will not stop until we fully investigate, analyze, and permanently end this massive fraud ring,” he concluded.
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