WASHINGTON (AP) — The U.S. Treasury Department has set its sights on businesses that facilitate money transfers to family members abroad, particularly targeting services commonly used by the Somali community in Minnesota, as fraud investigations expand under the Trump administration.
Treasury Secretary Scott Bessent revealed on Friday that recent scrutiny stems from past allegations linking the Minnesota Somali diaspora to fraudulent activities. Critics of the current administration argue that claims asserting the state serves as a hub of fraudulent money laundering activity lack substantial evidence.
The impetus for the latest investigations includes notable fraud cases, such as an alleged misappropriation of pandemic assistance funds by a nonprofit named Feeding Our Future, which prosecutors estimate resulted in losses exceeding $300 million.
While Bessent cited a report from the conservative City Journal suggesting taxpayer funds from fraudulently obtained government programs may have contributed to al-Shabab, a militant group in Somalia, he acknowledged the allegations remain unverified. Federal prosecutors have yet to lay charges that would substantiate claims of direct support for terrorism.
As part of the initiative, the Treasury Department plans to issue new orders requiring money transfer services utilized to send money to Somalia to implement enhanced verification processes. The Financial Crimes Enforcement Network will assist in identifying potential suspicious activities, alongside IRS involvement to investigate firms suspected of fraud, Bessent stated.
He emphasized that Treasury staff are actively investigating on-site to unveil the truth behind these allegations, amidst growing concern over the targeting of marginalized communities.
