Treasury Tightens Grip on Money Services After Minnesota Scandal

The U.S. Treasury implements stricter financial reporting for money services to combat illegal activities following a fraud scandal in Minnesota's social services system. Investigations focus on funds misused in COVID relief and links to the Somali community and possibly extremist groups.

The U.S. Treasury is intensifying financial reporting demands on money services companies to trace cash flows more effectively, according to Treasury Secretary Scott Bessent. This measure follows a revelation of fraud within Minnesota's social services system, costing taxpayers significant amounts.

In an effort to mitigate illegal activities, the Treasury plans to introduce a geographic targeting order. The order aims to ensure any suspicious activity is reported to the Financial Crimes Enforcement Network. Emphasizing the importance of this move, Bessent noted in a social media post that it would enhance lead development, particularly concerning financial movements to regions like Somalia.

This development comes after charging 77 individuals, many from the Somali diaspora, accused of misdirecting COVID relief funds meant for school meals. There's also an ongoing investigation into the potential diversion of state funds to the Al-Shabaab group in Somalia, a probe heightened by President Donald Trump's concerns over illicit financial activities in Minnesota.

(With inputs from agencies.)