The U.S. Treasury plans to investigate businesses linked to a large fraud case in Minnesota, stepping up oversight of money services firms to trace where cash moves, Treasury Secretary Scott Bessent said on Friday.
Speaking after details emerged about widespread abuse of Minnesota’s social services system, Bessent said the department will issue a geographic targeting order. The measure will require certain financial businesses to report transactions to the Financial Crimes Enforcement Network, known as FinCEN, to help investigators follow suspicious money flows.
In comments posted on X, Bessent said the added reporting would give investigators new leads, especially where funds move to “areas of concern, such as Somalia.” According to U.S. authorities, some of the money left the country through money services businesses rather than traditional banks.
Court records show that at least 77 people have been charged in the case. Prosecutors allege they diverted COVID-19 relief funds meant to provide meals for schoolchildren. Bessent said the scheme cost U.S. taxpayers hundreds of millions of dollars, with many of those charged coming from Minnesota’s Somali community.
Treasury officials have already deployed staff to examine the businesses involved, Bessent said, adding that FinCEN will soon issue formal notices of investigation. The department is also reviewing claims that some of the misused public funds may have ended up supporting the militant group Al-Shabaab in Somalia.
Bessent first announced the broader probe on Dec. 1, shortly after President Donald Trump accused Minnesota of becoming a center for fraudulent money laundering under Democratic Governor Tim Walz.