Treasury Secretary Scott Bessent said Friday that multiple money service businesses in Minnesota were under investigation for potentially transferring money stolen from the federal government overseas to Somalia.
Bessent made the comments during a press conference from the Minneapolis-St. Paul area where he announced actions that the Treasury Department and the IRS are taking to crack down on fraud. He said that multiple money service businesses — non-bank financial institutions that transmit money — had been informed that they were under investigation.
“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. Democratic Governor Tim Walz has allowed welfare programs and fraud to spiral out of control,” he said. “Billions of dollars intended for hungry children, housing for disabled seniors, and services for children with special needs were diverted to people who cheated the system, some of whom are not even American citizens.”
Bessent said that the IRS and the Financial Crimes Enforcement Network (FinCen), the arm of the Treasury that investigates money laundering and terrorist financing, were looking into whether money fraudulently obtained through welfare programs went to Al-Shabaab, an Islamic terror group in Somalia.
Both agencies are investigating whether financial institutions complied with regulations to detect money laundering and other illicit activities. He did not disclose which money service businesses were under investigation.
“These businesses had an obligation to comply with anti-money laundering laws, and they will be held responsible for any crimes they committed,” he said.
Additionally, Bessent said that banks in Hennepin County, which encompasses Minneapolis, and Ramsey County, home to St. Paul, were being required to submit information about money transferred overseas.
Bessent estimated that around $300 million in funds had been fraudulently taken from the federal government through welfare programs meant to help impoverished children.
When asked by The Daily Wire’s Mary Margaret Olohan during the conference if Walz may be potentially wrapped up in the investigation, Bessent said, “It’s 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.”
.@MaryMargOlohan asks Sec. Bessent what role Tim Walz played in the Somali fraud scandal: @SecScottBessent: “It’s clear that Gov. Walz has been negligent…We are actively pursuing all leads to see the level of involvement whether it’s limited to negligence and incompetence or… pic.twitter.com/AY5IGfprY9
— Daily Wire (@realDailyWire) January 9, 2026
In recent weeks, the Trump administration has mobilized multiple departments to investigate alleged widespread fraud in Minnesota, including allegations that millions of taxpayer dollars have been funneled to fraudulent daycares across the state throughout the past ten years.
The Department of Health and Human Services has stopped funding for childcare and other welfare programs to Minnesota while federal law enforcement investigates.
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