Feds Investigate Minnesota Firms Over Links to Somali Terror Group

The Trump administration is taking aggressive action in Minnesota after uncovering a massive web of welfare fraud that may have sent hundreds of millions in stolen U.S. tax dollars to Somalia and potentially into the hands of Al-Shabaab, a deadly Islamic terrorist group.

Treasury Secretary Scott Bessent made the bombshell announcement Friday during a press conference in the Minneapolis-St. Paul area, confirming that multiple money service businesses are under investigation for acting as conduits in a sprawling fraud operation involving non-citizens, fake daycare centers, and illicit financial transfers overseas.

“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,” Bessent said.

“Democratic Governor Tim Walz has allowed welfare programs and fraud to spiral out of control.”

According to Bessent, the IRS and FinCEN (the Financial Crimes Enforcement Network) are jointly investigating whether these financial institutions failed to detect and report illegal transfers, potentially violating federal anti-money laundering laws. The institutions, primarily located in Hennepin and Ramsey counties, are now being required to submit data on overseas wire transfers, including those to Somalia.

Key takeaways:

• Treasury estimates $300 million in stolen welfare funds have been funneled through fraudulent programs, possibly reaching terror organizations abroad.

• The money was originally intended for needy children, disabled seniors, and low-income families, but instead ended up in the hands of fraudsters many of whom, according to Bessent, aren’t even American citizens.

• Authorities are exploring whether the funds were laundered through money service businesses (MSBs) and sent to Al-Shabaab, the al-Qaeda-linked group responsible for countless bombings, assassinations, and mass killings in East Africa.

When asked if Democrat Governor Tim Walz may have legal exposure in the investigation, Bessent didn’t hold back:

“It’s clear that Governor Walz has been negligent in his fiduciary duties as the chief executive of the state of Minnesota... 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.”

This investigation comes as part of a larger Trump administration crackdown on domestic fraud and national security threats. Federal agencies have already halted funding for childcare and welfare programs in Minnesota while the investigation unfolds.

Earlier this month, the Department of Health and Human Services confirmed the suspension of Child Care Development Fund payments to Minnesota, citing ongoing fraud. Several fraudulent daycare centers, many tied to individuals within Somali immigrant communities, are believed to have been fronts used to funnel federal dollars overseas.

Bessent said criminal charges are on the table, not just for those running the scam, but for financial institutions that failed to follow basic anti-terrorism compliance laws.

The Biden-era refusal to investigate or address these schemes is now being unraveled, brick by brick and this administration isn’t blinking.

This is no longer just a state scandal. It’s a national security breach, and the Trump administration appears dead set on exposing every last detail no matter who it leads to.

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