Scott Bessent, U.S. Treasury Secretary, during an Economic Club of Minnesota event in Golden Valley, Minnesota, US, on Thursday, Jan. 8, 2026. (Ben Brewer/Bloomberg/Getty Images)
"These businesses had an obligation to comply with anti-money money laundering laws, and they will be held responsible for any crimes they committed," Bessent said.
COMER SAYS WALZ 'RETALIATED' AGAINST WHISTLEBLOWERS WHO WARNED OF MINNESOTA FRAUD FOR YEARS
In December 2025, Bessent announced that his agency was spearheading an investigation evaluating whether Minnesota’s funds were potentially diverted to al-Shabab, which is based in Somalia. So far, more than 75 people have been charged in connection with alleged fraud in the state — most of whom are part of Minnesota’s Somali population.
Bessent previously has said that a significant portion of the funds obtained through the alleged fraud schemes were transferred overseas.
Likewise, Bessent said Friday that the Internal Revenue Service (IRS) Civil Enforcement is auditing financial institutions that allegedly supported the laundering of Minnesota funds, and that the IRS is planning to unveil the "formation of a task force to investigate any fraud and abuse involving pandemic-era tax incentives and misuse of 501(c)(3) tax-exempt status by entities implicated in the Minnesota based social services fraud schemes."
Minnesota Governor Tim Walz speaks during a press conference on new gun legislation at Bloomington City Hall in Bloomington, Minnesota, on Aug. 1, 2024. (Stephen Maturen/Getty Images)
At least 77 people have been charged in that scheme, which took advantage of the U.S. Department of Agriculture's decision to waive certain Federal Child Nutrition Program requirements.
Likewise, another alleged fraud scheme in the state stems from the Housing Stability Services Program, which allegedly offered Medicaid coverage for housing stabilization services in an attempt to help those with disabilities, mental illnesses and substance-use disorders receive housing.
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The Justice Department so far has charged less than a dozen people for allegedly defrauding the program that runs through Minnesota’s Medicaid service, but more charges are expected.
The bulk of those charged are part of Minnesota’s Somali population, prompting Trump to announce in November that he was ending the Temporary Protected Status for Somali migrants in Minnesota that offers protections against deportation.
Diana Stancy is a politics reporter with Fox News Digital covering the White House.
https://www.foxnews.com/politics/bessent-blames-walz-treasury-probes-whether-minnesota-fraud-funds-reached-terror-group-al-shabab