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Treasury Opens Terror-Finance Probe Into Minnesota Fraud

A new Treasury review of claims that diverted funds reached Al‑Shabaab marks a sharp federal escalation focused on Minnesota’s pandemic‑era fraud.

MINNEAPOLIS, MINNESOTA - JUNE 28: Minnesota Gov. Tim Walz presents a Minnesota flag to the family of DFL Rep. Melissa Hortman and her husband Mark Hortman after a funeral ceremony at the Basilica of Saint Mary on June 28, 2025 in Minneapolis, Minnesota. Law enforcement agencies captured Vance Boelter on June 15th in connection with the killing of Rep. Hortman and her husband, Mark, who were shot at their home on June 14th. DFL State Sen. John Hoffman and his wife were also shot and hospitalized in a separate incident. Minnesota Gov. Tim Walz said during a press conference that the shooting "appears to be a politically motivated assassination." (Photo by Stephen Maturen/Getty Images)
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Overview

  • Treasure Secretary Scott Bessent said the department is investigating allegations that stolen Minnesota social‑service dollars were routed to Al‑Shabaab, promising to share findings as the inquiry proceeds.
  • The White House published a blistering statement blaming Gov. Tim Walz for oversight failures, citing more than $1 billion in losses and saying 78 of 86 defendants charged to date are of Somali background.
  • Additional federal moves were reported, including a Transportation Department threat to withhold $30 million over commercial license issues, a Small Business Administration review of Somali‑linked nonprofits, and a New York Times report of about 100 ICE personnel deploying to the Twin Cities.
  • Ongoing prosecutions include the Feeding Our Future case tied to roughly $250 million in alleged child‑nutrition fraud, with approximately 86 people charged across schemes and many convictions already secured.
  • Walz said he welcomes investigations and takes responsibility for prosecutions while cautioning against demonizing Minnesota’s Somali community, as an anonymous X account claiming to represent DHS staff accused his administration of ignoring fraud warnings and retaliating against whistleblowers.