In Minnesota, Secretary of the Treasury Scott Bessent has announced a series of initiatives aimed at addressing widespread government benefits fraud that has resulted in significant losses for taxpayers. The measures are intended to increase transparency and ensure accountability for public funds.
“President Trump has instructed the administration to bring accountability for the hardworking people of Minnesota,” said Secretary of the Treasury Scott Bessent. “Under Democratic Governor Tim Walz, welfare fraud has spiraled out of control. Billions of dollars intended for feeding hungry children, housing disabled seniors, and providing services for children in need were diverted to benefit Somali fraud rings.”
During his visit to the Twin Cities, Secretary Bessent met with financial institutions, victims of fraud, state officials, and community members. He also plans to lead a roundtable discussion with affected citizens and chair a meeting involving both private sector financial institutions and law enforcement agencies at various levels. The goal is to improve information sharing related to identifying and investigating government benefits fraud.
According to the Department of the Treasury, organized groups have stolen billions from Minnesota’s state programs by redirecting funds meant for social services toward personal purchases such as real estate, luxury goods, vehicles, planes, and international travel.
To address these issues:
- The Financial Crimes Enforcement Network (FinCEN) is investigating several money services businesses in Minnesota by issuing notices requesting information under the Bank Secrecy Act.
- The Internal Revenue Service (IRS) will launch a task force focused on uncovering misuse of pandemic-era tax incentives and abuse of 501(c)(3) tax-exempt status linked to fraudulent activities in social service programs.
- FinCEN has implemented a Geographic Targeting Order requiring banks and money transmitters in Hennepin and Ramsey Counties—including Minneapolis and St. Paul—to report transactions over $3,000 sent abroad. This measure aims to provide law enforcement with more data about overseas recipients involved in fraudulent schemes.
- FinCEN issued an alert urging financial institutions nationwide to identify and report suspicious activity connected with Federal child nutrition programs after it was revealed that at least $300 million intended for needy children had been misappropriated by fraud rings operating in Minnesota.
- Law enforcement agencies received training from FinCEN on how best to use financial data—such as Suspicious Activity Reports—to detect and investigate complex fraud schemes.
These steps are expected to support ongoing investigations, accelerate prosecutions, and aid efforts to recover laundered taxpayer funds sent internationally.
