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Treasury Secretary Scott Bessent said it’s possible that Minnesota tax dollars could have been filtered to terrorist group al-Shabab, and cast blame on Minnesota Gov. Tim Walz as Minnesota faces investigations into multiple alleged fraud schemes plaguing the state’s social services system.
Bessent said that the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) that money service businesses believed to have been connected to the fraud scheme, although he did not name which financial institutions are suspected to be involved.
“We are thoroughly investigating the fraud, including funds sent to Somalia through money service businesses, which provide financial services outside of a formal bank,” Bessent said during a virtual press conference Friday. “These funds could have potentially been diverted to the terrorist organization al-Shabab. We have traced where the money went and are examining that.”
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…
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