Author: David Lauder and Andrea Shalal
MINNEAPOLIS, Jan 8 (Reuters) – U.S. Treasury Secretary Scott Bessant stressed on Thursday the U.S. government is committed to recovering funds stolen in a social services fraud scheme in Minnesota, prosecuting those responsible and preventing future crimes.
In remarks prepared for a speech at the Economic Club of Minnesota, Bessant said the Treasury Department will also investigate similar fraud in other states.
“Minnesota is ground zero for the worst welfare scam to date in our nation’s history. Under Governor Tim Walz, billions of dollars intended for families in need, housing for disabled seniors and services for children were diverted to welfare fraudsters,” Bessant said.
“I am here this week to demonstrate the U.S. Department of the Treasury’s unwavering commitment to recovering stolen funds, prosecuting perpetrators of fraud, preventing scandals like this from happening again, and investigating similar schemes on a state-by-state basis.”
Minnesota Gov. Tim Walz, a Democrat and 2024 vice presidential candidate, announced this week that he will not seek a third term and instead focus on allegations of state welfare fraud that have become a crisis in the wake of mounting attacks from the administration of Republican U.S. President Donald Trump.
The Trump administration has specifically targeted Walz and Minnesota, including its large Somali-American and Somali immigrant population, alleging fraud since 2020 by some nonprofit organizations that administer child care and other social service programs in the state with the support of federal funds.
At least 56 people have pleaded guilty since federal prosecutors began bringing charges against Trump’s Democratic predecessor, Joe Biden, in 2022.
Walz called the fraud scandal a crisis but criticized Trump and other Republicans, calling it a vicious attack.
Bessant said on X last month that the Treasury Department was increasing financial reporting requirements for money services businesses, which would help track where cash is going.
Bessant said the fraud in Minnesota cost taxpayers hundreds of millions of dollars, including funds sent to Somalia through money services businesses rather than formal banks.
(Reporting by David Lawder and Andrea Shalal; Editing by Cynthia Osterman)
