Treasury Secretary Bessent vows to leave 'no stone unturned' in Minnesota fraud probe

Treasury Secretary Scott Bessent announced a new set of enforcement measures Friday aimed at identifying and investigating fraud as the Minnesota scandal, which involved multiple government benefit scams, continues to rock the nation.

Bessent, who is on the ground in Minnesota, said the Trump administration will leave "no stone unturned" in recovering taxpayer dollars, pointing to expanded IRS enforcement, audits of financial institutions and new investigations into nonprofit and pandemic-era tax credit abuse.

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"Treasury will deploy all tools, all tools to bring an end to this egregious unchecked fraud and hold perpetrators to account," Bessent told reporters during a news conference. "Minnesota will serve as a genesis and a launching pad for investigations into other states," he added.

Bessent's comments come amid a sweeping fraud scandal in Minnesota that has drawn national attention and is estimated to involve at least $9 billion in misused funds. Minnesota Gov. Tim Walz, a Democrat, announced Monday he will not seek re-election amid growing scrutiny over the state’s handling of the case.

A daycare, Childcare Learning, had signage with a typo and has since closed. 

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He also said Treasury has so far identified at least four money service businesses in the Minneapolis–St. Paul area that are under investigation for their potential role in the fraud scheme. Bessent declined to name the companies, citing the sensitivity of the ongoing investigation.

"These businesses had an obligation to comply with anti-money laundering laws, and they will be held responsible for any crimes they committed," Bessent said, noting that no charges have been filed and that the businesses have been notified they are under investigation.

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When pressed about Walz’s potential involvement in the fraud and whether it was directed from overseas, Bessent declined to provide additional details.

"We do not yet know the depth, breadth, or level of collusion involved in this financial calamity that Governor Walz has allowed to occur, or whether it was directed from overseas," Bessent said.

Treasury said more information will be made public as the investigations continue, suggesting additional disclosures and possible enforcement actions in the coming weeks or months.

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Speaking at the Minnesota Economic Club on Thursday, Bessent described the amount of federal funds and taxpayer dollars lost to this scheme as one of "the most egregious welfare scams in our nation’s history to date."

He said President Donald Trump’s proposed $1.5 trillion increase in defense spending could be achieved if the federal government successfully recovers funds siphoned off by fraud, waste, and abuse, pointing to welfare fraud investigations as a potential source of funding.