The U.S.Treasury is investigating what it calls “rampant benefits fraud” in Minnesota.
As part of this effort,the department’s Financial Crimes Enforcement Network (FinCEN) has notified some businesses thay are under investigation for fraud related to COVID-era tax incentives,U.S. Treasury Secretary Scott bessent announced Friday (Jan.9).
“Complex fraud rings in Minnesota have stolen billions of dollars from state programs for their personal enrichment in the United States and abroad,” the department said in a news release.
FinCEN has issued a Geographic Targeting Order requiring banks and money transmitters in Hennepin and Ramsey counties (Minneapolis and St. Paul) to report additional information about funds sent outside the U.S.These businesses must report transactions of $3,000 or more with beneficiaries based outside the United States.
Speaking at a news conference, Bessent declined to name the businesses. He stated the goal is to stop an alleged social welfare fraud scheme in Minnesota that the government believes may have diverted funds to Somalia’s Al-Shabaab terrorist group.
“We have traced where the money went and are examining it,” Bessent said during a virtual news conference after meeting with Minnesota financial institutions, per Reuters.
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This effort coincides with an increased U.S. government presence in Minnesota, including thousands of Immigration and Customs Enforcement (ICE) personnel conducting enforcement operations in Minneapolis. Tensions escalated last week when an ICE officer shot and killed Renee Good.
A report by CBS News includes comments from minnesota Attorney General Keith ellison’s office, which “categorically rejects the premise that the ‘underlying reason’ trump has ordered the outsized presence of ICE in Minnesota is because of fraud,” and added “Ellison does have extensive experience in successfully fighting fraud.”
Simultaneously occurring, the recent PYMNTS Intelligence report “2025 State of Fraud and Financial Crime in the United States,” commissioned by block, found that financial institutions are recognizing fraud as a “networked phenomenon.”
Criminal groups, the report said, share tools, mule accounts, compromised credentials, and customer service scripts. They test defenses collaboratively, refining what works and discarding what doesn’t. Often, the same infrastructure targets multiple firms across industries.This undermines the idea that fraud can be contained within a single organization; a weakness in one company can expose an entire sector.