WASHINGTON — In a dramatic escalation of the federal crackdown on what officials are calling one of the largest welfare fraud schemes in U.S. history, Treasury Secretary Scott Bessent announced Friday that investigators are flooding into Minnesota to dismantle a sprawling network of illicit financial transfers linked to Somalia. But Bessent didn’t stop at policy details — he delivered a pointed broadside at Democratic Gov. Tim Walz, warning that the former vice presidential candidate “will pay dearly” for the scandal unfolding on his watch.
“We will NOT stop until we have fully investigated, analyzed, and permanently shut down this large-scale fraud ring,” Bessent declared in a blistering statement posted on X and echoed during a press briefing at the Treasury Department. “Tim Walz will pay dearly for this.” The remarks, laced with uncharacteristic personal venom from a cabinet official, have ignited a firestorm in political circles, raising questions about accountability, immigration policy, and the deepening partisan rifts under President Trump’s second term.
The probe centers on allegations that hundreds of millions in federal funds — intended for child nutrition programs during the COVID-19 pandemic — were siphoned off through fake nonprofits, luxury purchases, and shadowy remittances to Somalia, potentially fueling terrorist groups like al-Shabaab. Minnesota, home to the largest Somali-American community in the nation, has become ground zero for the investigation, with Bessent’s team targeting Money Services Businesses (MSBs) that facilitate international transfers outside traditional banking channels.
The Roots of the Scandal: Feeding Our Future and the COVID Cash Grab
The controversy traces back to the “Feeding Our Future” program, a federally funded initiative administered by the U.S. Department of Agriculture (USDA) and overseen by Minnesota’s state agencies. Launched to provide meals to children during pandemic lockdowns, it ballooned into a $250 million-plus bonanza for fraudsters, according to federal prosecutors.
From 2020 to 2022, dozens of organizations — many tied to the Somali community in Minneapolis — allegedly submitted bogus claims for serving millions of meals that never existed. Instead, the money flowed into high-end cars, luxury homes, and overseas accounts. To date, 70 individuals have been charged, with 18 pleading guilty. Authorities have recovered about $65 million, but the total loss to taxpayers could exceed $300 million, making it the biggest pandemic-era fraud case in the country.
What elevates this from a routine embezzlement story to a national security concern is the international angle. Investigators claim some funds were funneled through MSBs like Western Union and MoneyGram to Somalia, a fragile East African nation plagued by instability and the al-Qaeda-affiliated al-Shabaab militia. While concrete links to terrorism remain under wraps, Bessent’s team is scrutinizing remittances for signs of money laundering or extremist financing.
“Minnesota’s egregious fraud has cost taxpayers hundreds of millions, including funds sent to Somalia through MSBs,” Bessent said in his statement. These businesses, which operate with lighter regulations than banks, have become a focal point. To tighten the noose, Bessent issued a Geographic Targeting Order (GTO) — a rare Treasury tool typically used against drug cartels or real estate schemes — requiring MSBs in key Minnesota areas to report all transactions over $3,000 headed to high-risk countries like Somalia.
The order mandates enhanced due diligence, including customer IDs and transaction details, allowing FinCEN (the Financial Crimes Enforcement Network) to flag suspicious patterns in real time. “We’re surging investigators into the state,” Bessent added during his briefing, flanked by IRS and FBI agents. “This isn’t just about recovering dollars — it’s about rooting out a network that exploits American generosity and potentially endangers lives abroad.”
Walz in the Crosshairs: Political Fallout in the North Star State
Bessent’s direct jab at Walz — a folksy Midwesterner who ran as Kamala Harris’s running mate in the ill-fated 2024 campaign — marks a sharp turn in the rhetoric. Walz, who has governed Minnesota since 2019, oversaw the state’s Department of Education, which distributed the USDA funds. Critics, including Trump allies, accuse him of lax oversight, pointing to warnings from whistleblowers as early as 2021 that were allegedly ignored.
“Tim Walz turned a blind eye while fraudsters ran wild with taxpayer money,” said House Oversight Committee Chairman James Comer (R-Ky.), who has vowed congressional hearings. “If Bessent’s probe uncovers negligence at the top, heads will roll — starting with the governor’s.”
Walz fired back in a hastily arranged press conference in St. Paul, dismissing the attacks as “partisan theater” designed to distract from Trump’s economic policies. “This fraud began under the previous administration and was aggressively pursued by my team and federal authorities long before Bessent showed up,” Walz said, referencing the 2022 indictments under the Biden Justice Department. “To suggest I’m personally responsible is absurd and dangerous — it’s an attempt to smear an entire community for political points.”
The Somali-American diaspora, concentrated in Minneapolis’s Cedar-Riverside neighborhood (often called “Little Mogadishu”), has borne the brunt of the scrutiny. Rep. Ilhan Omar (D-Minn.), the first Somali-American in Congress, condemned the probe as a “racist witch hunt” targeting immigrants. “This is Trumpism at its worst: using legitimate investigations to stoke fear and division,” Omar tweeted, echoing concerns from civil rights groups like CAIR (Council on American-Islamic Relations). “Most Somalis in Minnesota are hardworking families sending money home to relatives, not terrorists.”
Yet the drama intensified when leaked documents — unverified but circulating on conservative outlets like Gateway Pundit — suggested some fraud proceeds bought weapons in Somalia. Bessent neither confirmed nor denied the reports but reiterated his vow: “We will not stop until this ring is shut down permanently.” His words, delivered with a steely glare, evoked images of a financial sheriff cleaning up a corrupt frontier town.
Broader Implications: Immigration, Terrorism, and Trump’s Agenda
The Minnesota probe fits neatly into President Trump’s “America First” playbook, which prioritizes cracking down on fraud, immigration abuses, and foreign threats. Bessent, a Wall Street veteran who once worked for George Soros but now embodies MAGA economics, has made anti-fraud initiatives a signature issue. His department has already clawed back billions in pandemic relief and imposed sanctions on entities linked to terrorism financing.
Experts warn, however, that the aggressive tactics could backfire. “GTOs are powerful tools, but overbroad application risks chilling legitimate remittances,” said Sarah Paoletti, a University of Pennsylvania immigration law professor. Somali-Americans send an estimated $1.4 billion annually to their homeland, supporting families amid famine and conflict. Stricter reporting could disrupt that lifeline, fueling accusations of discrimination.
Politically, the scandal could erode Democratic strongholds in Minnesota, a battleground state Walz helped flip blue in recent cycles. With midterms looming in 2026, Republicans smell blood. “Walz is cooked,” proclaimed one viral X post from a pro-Trump account, amplifying Bessent’s rhetoric. Walz’s approval ratings have dipped amid the headlines, though he remains defiant: “I’ll cooperate fully, but I won’t be bullied.”
As investigators descend on Minneapolis, combing through bank records and MSB logs, the probe promises more revelations. Will it uncover direct ties to al-Shabaab? Or expose systemic failures in state oversight? Bessent’s personal stake — “Tim Walz will pay dearly” — suggests this is no ordinary audit. In a polarized America, where every scandal becomes a weapon, Minnesota’s fraud ring could reshape the political landscape, one remittance at a time.
For now, the Treasury’s hounds are unleashed, and the North Star State’s governor is squarely in their sights. As one anonymous source close to the investigation told Fox News: “This is just the beginning. The truth will come out, and it won’t be pretty.”