WASHINGTON (AP) — The U.S. Treasury Department is ramping up its investigations into money transfer businesses predominantly used by the Somali community in Minnesota, according to Treasury Secretary Scott Bessent. This announcement indicates a proactive stance by the Trump administration to investigate potential fraudulent activities tied to these services.
President Donald Trump has previously characterized Minnesota as a hub of fraudulent money laundering activity, particularly concerning the Somali diaspora. However, substantial evidence supporting these allegations has yet to surface. The focus on this community has been intensified following various fraud cases, including the well-publicized non-profit Feeding Our Future, which faces accusations of siphoning off pandemic relief funds meant for school meals, resulting in estimated losses of around $300 million.
Bessent referred to a report by the conservative City Journal, which speculated that taxpayer money misappropriated from government programs could be funneled to al-Shabab, a militant group associated with al-Qaida, operating in parts of Somalia. Nonetheless, the assertions made in the report remain largely unverified and federal prosecutors have yet to charge anyone involved with any terrorist link.
On Friday, Bessent announced plans for the Treasury Department to issue new directives requiring money wire services used to send money to Somalia to implement stringent verification processes. Furthermore, the Financial Crimes Enforcement Network and the Internal Revenue Service are set to join the efforts, targeting firms suspected of engaging in fraudulent operations.
Bessent emphasized the necessity for thorough investigations, stating, Additionally, Treasury personnel are on the ground working hard to uncover the facts. This initiative marks a potentially significant shift in regulatory practices concerning money transfers to overseas communities, particularly those engaged in remittances to family members in Somalia.
