Money Movers in the Spotlight: U. S. Treasury Tightens Grip on Fraud

Increased Scrutiny Following Major Fraud Case

The U.S. Treasury is intensifying its oversight of money services businesses. This action follows a significant fraud case in Minnesota, where COVID relief funds intended for school children's meals were misappropriated. Over 77 individuals, many from the Somali community, are facing charges in connection with this scam.

New Rules and Investigations

The Treasury is implementing new regulations to improve tracking of cash flows, with a particular focus on funds directed towards Somalia. This initiative aims to detect and prevent illegal financial activities. Investigators have already begun examining these businesses, with more probes anticipated in the near future.

Financial Impact and Concerns

The fraud has resulted in substantial losses for taxpayers. Some of these funds were transferred to Somalia through money services rather than banks. The Treasury is also investigating claims that some of the misappropriated money may have reached the Al-Shabaab militant group.

Political Context

Treasury Secretary Scott Bessent announced this investigation after President Donald Trump designated Minnesota as a hotspot for fraudulent money laundering. The issue emerged during the tenure of Governor Tim Walz.