In recent years, criminals have exploited the culture of “Minnesota nice” to steal billions of dollars in taxpayer money in one of the most egregious frauds in our nation’s history. Under Democratic Gov. Tim Walz, these fraudsters — many of whom are not even U.S. citizens — lined their pockets with money initially intended to feed hungry children, house disabled seniors and provide services to young students with special needs.
Last week, my team traveled to Minneapolis to meet in person with the investigators, prosecutors, lawmakers and community members on the front lines of the fight against this crime. Their frustration was palpable. There we learned more about a transnational money laundering scheme that continued to fester under President Joe Biden and the state’s political leadership. The scandal was unprecedented in scale and scope. But so does President Trump’s plan to fix this by tackling fraud at its source — both in Minnesota and across the country.
At the direction of the President, the Treasury Department is investigating the transfer of money allegedly sent from affected parts of Minnesota to other countries, including Somalia. These funds are often sent through money services companies, which provide financial services outside the banking system. This money could potentially have been diverted to terrorist organizations such as Al-Shabaab. The Treasury Department has a long history of following money to financially stifle bad actors such as the Mafia and Mexican drug cartels. Now we are doing the same to shut down Somali fraud gangs.
SECRETARY OF THE TREASURY PROMISES TO LEAVE ‘NO STONE UNWEAR’ IN MINNESOTA FRAUD PROBE
As part of this effort, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the IRS are investigating financial institutions that may have played a role in encouraging rampant fraud. Specifically, we evaluate whether these institutions have met their legal obligations under the Bank Secrecy Act and Treasury regulations, which are intended to detect money laundering and protect the U.S. financial system from abuse.
US Treasury Secretary Scott Bessent speaks with members of the media outside the White House in Washington, DC on Wednesday, November 5, 2025. (Eric Lee/Bloomberg via Getty Images)
The Ministry of Finance is also taking steps to disrupt criminal networks from within. Minnesota’s fraud rings have many tentacles. But we will expose them all by offering incentives to whistleblowers who are willing to cooperate with law enforcement and identify perpetrators.
BESSENT Blames WALZ As Treasury Investigates Whether Minnesota Fraud Funds Reached Terror Group Al-Shabab
In addition to identifying the source of the fraud, it is crucial that we prevent any more taxpayer money from leaving the country for improper purposes. That’s why FinCEN has issued a Geographic Targeting Order for Hennepin and Ramsey counties in Minnesota, requiring banks and money transmitters to report additional information about funds transferred outside the United States worth $3,000 or more.
The Treasury Department has also trained Minnesota law enforcement agencies to use the data they collect from these reports to prevent this scandal from happening again. This will scrutinize fraudulent companies, promote prosecutions and help recover internationally laundered money.
BESSENT SAYS MINNESOTA FRAUD RECOVERY COULD HELP FUND TRUMP’S $1.5T DEFENSE PLAN
If individuals are on benefits, they should not be in a financial position to send money abroad. And yet thousands still do. This means that American taxpayers are effectively supplementing the incomes of foreign individuals.
This has to stop.
To assess the prevalence of this practice, the Treasury Department’s Geographic Targeting Order requires financial institutions transferring money abroad from Hennepin and Ramsey counties to check a box indicating whether the money comes from a federal, state, or local government benefit program.
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Unfortunately, Minnesota does not have a monopoly on this type of fraud. Similar misconduct almost certainly occurs in many other states, especially states like California, New York and Illinois, which impose lax controls on the use of government benefits. Our own Government Accountability Office estimates that the government could lose more than $500 billion each year to fraud. This is a staggering figure greater than the GDP of most countries. It represents up to 10% of federal tax revenue and approximately 1% to 2% of GDP annually.
Completely eliminating this fraud would, more than any other federal measure, help ease the burden on taxpayers and reduce the budget deficit. That’s why President Donald Trump created a new division within the Justice Department for the sole purpose of prosecuting fraud nationally.
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The President wants to scale the model we established in Minnesota to root out waste, fraud and abuse in every corner of the country. Extraordinary crime requires an extraordinary response – and President Trump has provided that by launching the largest anti-fraud campaign of the 21st century.
Under previous administrations, criminals managed to turn government benefits into a multibillion-dollar enterprise, systematically cheating taxpayers out of their hard-earned money. But that ends now. President Trump has launched a whole-of-government effort to recover stolen money and prosecute tax thieves. He will give no quarter to fraudulent criminals – in Minnesota or anywhere in the country.
CLICK HERE FOR MORE ABOUT SECRETARY OF THE TREASURY SCOTT BESSENT
