Treasury Secretary Scott Bessent Unveils Sweeping Anti-Fraud Initiatives in Minnesota

WASHINGTON, D.C. – U.S. Treasury Secretary Scott Bessent announced a series of new initiatives on January 9, 2026, aimed at combating widespread government benefits fraud in Minnesota. The announcement, made during his visit to the state, underscores the administration's commitment to recovering misused funds and strengthening financial safeguards.

New Measures to Combat Fraud

Secretary Bessent outlined several key actions being taken by the U.S. Department of the Treasury to address what he described as 'rampant' fraud that has cost taxpayers billions of dollars. These initiatives are designed to increase transparency, seek accountability, and protect the financial system.

• IRS Task Force: The Internal Revenue Service (IRS) will launch a dedicated task force to investigate the misuse of funding. This task force will target fraud and abuse involving pandemic-era tax incentives and the potential misuse of 501(c)(3) tax-exempt status by entities implicated in Minnesota-based social services fraud schemes.
• FinCEN Investigations: The Treasury's Financial Crimes Enforcement Network (FinCEN) has issued four notices of investigation to money services businesses located in Minnesota. These notices request information from businesses operating outside the formal banking system for examination and investigative purposes under the Bank Secrecy Act.
• Geographic Targeting Order (GTO): FinCEN has implemented a GTO requiring banks and money transmitters in Hennepin and Ramsey Counties to report international transfers of $3,000 or more. This measure is intended to provide additional information to assist in investigations and accelerate the recovery of laundered funds.
• FinCEN Alert: An alert has been issued to financial institutions to help them identify and report fraud associated with Federal child nutrition programs. These programs have reportedly been defrauded of at least $300 million in Minnesota.
• Law Enforcement Training: FinCEN is providing on-the-ground training for Minnesota-based federal, state, and local law enforcement on how to utilize financial data, such as Suspicious Activity Reports, to more effectively combat these fraud schemes.

Addressing Billions in Misused Funds

Secretary Bessent stated that 'President Trump has instructed the administration to bring accountability for the hardworking people of Minnesota.' He highlighted that 'Under Democratic Governor Tim Walz, welfare fraud has spiraled out of control.' Billions of dollars intended for critical social services, including feeding hungry children, housing disabled seniors, and providing services for children in need, were allegedly diverted. Perpetrators reportedly used stolen funds to acquire residential and commercial real estate, luxury goods, vehicles, planes, and international flights.

During his visit to the Twin Cities, Secretary Bessent engaged with financial institutions, fraud victims, state leaders, and community members. He also conducted a roundtable discussion with affected citizens and chaired a public-private partnership meeting with law enforcement and financial institutions to enhance fraud identification and investigation efforts.

National Implications

Secretary Bessent indicated that the strategies launched in Minnesota could serve as a 'genesis and a launching pad for investigations into other states,' suggesting a broader national effort to combat similar fraud. The Treasury Department's actions come amidst ongoing scrutiny of massive fraud in social services programs within Minnesota.