Last week, U.S. Treasury Secretary Scott Bessent announced a series of measures aimed at addressing widespread government benefits fraud in Minnesota, particularly schemes linked to Somali organized crime in Minneapolis. During his visit, Bessent held discussions with victims of the fraud, met with financial institutions, spoke about economic policy at the Economic Club of Minnesota, and engaged high school students on financial literacy.
The Treasury Department has initiated investigations into several money services businesses operating in Minnesota. It also implemented a Geographic Targeting Order requiring more detailed reporting of certain international transactions. This move is intended to help accelerate prosecutions and aid in recovering laundered funds. Additionally, an alert was issued to financial institutions about fraudulent activity in federal child nutrition programs, and law enforcement received specialized training on using financial data for fraud investigations. The IRS has begun audits of banks suspected of laundering proceeds from these schemes and formed a task force to examine misuse of pandemic-era tax incentives and nonprofit status.
“Under President Trump's leadership, the entire administration is focused on delivering results for the American people. Our citizens have a right to know that their tax dollars are not being diverted to fund acts of global terror or to fund luxury cars for fraudsters,” said Secretary Scott Bessent.
Bessent criticized Minnesota Governor Tim Walz's handling of the situation: “It is clear that Governor Walz has been negligent in his fiduciary duties as the chief executive of the state of Minnesota, that this would happen on his watch, and we are actively pursuing all leads to see the level of involvement, whether it's limited to just negligence and incompetence or is something more than that.”
He further emphasized Treasury’s commitment: “...All entities in the administration will be pursuing this so that we can get the biggest recoveries possible and we will see, and we are going to leave no stone unturned, whether it was fraudulent real estate, whether it is money that has been wired overseas, we will be tracking it to the Middle East and East Africa. This is why Treasury is involved. This is what we do. We track, we follow the money, and we intend to follow it. As much as we can prosecute the individuals no matter where they are, whether they are in the Minnesota government or they are sitting in East Africa, we will find them.”
Bessent compared these crimes with cartel-related money laundering: “And we view this crime as very similar to the cartel's money laundering. Many of the same approaches, many of the same shell companies. So, we will see where it goes out from here. That will be a starting point. And as I said, Minnesota is going to be the protocols, the procedures, and the investigative techniques as well as collaboration with other agencies. Minnesota is going to be genesis for a national rollout.”
During a roundtable discussion attended by fraud victims along with state leaders and law enforcement officials—including St. Paul Police Federation president Mark Ross—participants criticized Governor Walz’s response.
“Treasury is here today because this is what we do. We follow the money...One [other] thing that we are going to announce is incentives for whistleblowers...We will be offering cash rewards to whistleblowers,” said Bessent.
Jennifer Larson from Holland Center highlighted service disruptions caused by broad shutdowns: “Minnesota does not have to face a choice between tolerating fraud and shutting down an entire sector...A blanket shutdown does not distinguish between fraud and fidelity...Clinics are closing...Children with autism are experiencing service disruptions that will have lifelong consequences.”
Mark Ross pointed out how significant sums could otherwise support public safety: “Two billion dollars could fund our entire police department for ten years...this is probably just tip of iceberg.” Mille Lacs County Sheriff Kyle Burton commented on legal shortcomings: “Once you steal $35k you might as well steal $35 million because penalty same...laws just not adequate.” Journalist Liz Collin blamed local media structures for lackluster coverage: “On media issue...we truly have one most cowardly complicit media structures…that’s why fraud never tackled head on.” Rep Lisa Demuth thanked federal intervention: “So…pervasive fraud…will stop now…I thank our administration partners for stepping in where Governor Walz…and Democrats have failed.”
At an event hosted by Economic Club of Minnesota—where Bessent discussed economic policy—he cited GDP growth trends while outlining plans tied closely with Trump Administration policies such as tax cuts targeting working families:
“President Trump has incentivized historic investments…through working families tax cut…By allowing full expensing for factories…bill lowers cost capital makes cheaper build America…capex comeback 12% surge business investment through first three quarters 2025…the largest non-pandemic increase over decade…”
Bessent reiterated commitment against benefit diversion under current state leadership: “Under Governor Tim Walz billions intended families need housing disabled seniors services children were diverted benefit fraudsters…I am here signal U.S Treasury unwavering commitment recovering stolen funds prosecuting fraudulent criminals preventing scandals like this ever happening again investigating similar schemes state by state.”
The trade deficit recently fell to its lowest level since 2009—a development attributed by officials partly due to ongoing efforts targeting illicit activities.
