Treasury Deploys Rare Financial Order to Crack Down on Minnesota Benefits Fraud

The Treasury Department has deployed a rarely used financial surveillance tool against alleged benefits fraud in Minnesota, requiring banks to report more detailed information on international transfers as part of a broader enforcement effort targeting what officials describe as complex fraud networks that have siphoned billions from state and federal programs.

During a visit to the Twin Cities earlier this month, Treasury Secretary Scott Bessent announced the Geographic Targeting Order (GTO) for Hennepin and Ramsey Counties, which includes Minneapolis and St. Paul. The directive, issued by the Financial Crimes Enforcement Network (FinCEN), mandates enhanced reporting on outbound international transfers of $3,000 or more beginning February 12, 2026.

Background and Context

Geographic Targeting Orders represent one of FinCEN's most flexible enforcement tools under the Bank Secrecy Act. Unlike permanent regulations, GTOs are temporary directives—typically lasting 180 days—that require additional financial reporting in specific geographic areas when authorities suspect criminal activity.

In recent years, GTOs have primarily been used to monitor potential money laundering in real estate transactions and cash activity near the southern border. From 2020 to 2024, Treasury issued approximately two GTOs annually before increasing that number to three in 2025, according to Treasury records.

Key Figures and Entities

Treasury Secretary Scott Bessent framed the Minnesota action as part of President Trump's directive "to bring accountability for the hardworking people of Minnesota," explicitly pointing to what he characterized as state oversight failures under Democratic Governor Tim Walz. The announcement follows Trump's controversial remarks in December 2025 describing some Somali immigrants as "garbage," comments that drew criticism from civil rights organizations and local leaders.

According to Treasury officials, the fraud allegedly involves networks that exploited programs providing food, housing, and social services to vulnerable populations. While some investigations have reportedly identified Somali-linked networks, critics caution against conflating criminal activities with Minnesota's large Somali-American community.

Legal and Financial Mechanisms

The Minnesota GTO significantly lowers the reporting threshold for international transfers in targeted counties. Typically, financial institutions must file Currency Transaction Reports (CTRs) for cash transactions exceeding $10,000 in a single day. However, banks must also file Suspicious Activity Reports (SARs) for transactions of any size if they suspect criminal activity, including deliberate structuring to avoid reporting requirements.

By requiring enhanced reporting on international transfers of $3,000 or more, authorities aim to identify patterns that might otherwise escape detection. Treasury officials believe fraud rings frequently structure transactions to move large amounts overseas incrementally, staying below traditional monitoring thresholds while laundering funds through financial institutions and ultimately using the proceeds to purchase real estate, luxury vehicles, and other high-value items abroad.

International Implications and Policy Response

The Treasury's approach reflects growing concern about the challenges of recovering funds once they leave the United States. Federal investigators note that cross-border transfers create significant obstacles to identifying ultimate beneficiaries and recovering stolen assets.

Beyond the GTO, Treasury has issued four notices of investigation to Minnesota-based money services businesses, enhanced IRS audits of potentially complicit financial institutions, and created a task force focusing on pandemic-era tax incentives and nonprofit tax exemption abuses. FinCEN also issued a specific alert warning banks about fraud schemes targeting federal child nutrition programs, which officials estimate have diverted at least $300 million in Minnesota alone.

The enforcement actions represent the latest example of the Trump administration's increasing reliance on GTOs as rapid-response tools against financial crime, raising questions about the balance between effective law enforcement and expanded financial surveillance. Critics argue that such measures impose significant compliance burdens on local institutions with minimal oversight, while supporters contend they provide necessary flexibility to address evolving criminal schemes that outpace traditional regulatory approaches.

Sources

This report draws on Treasury Department announcements, FinCEN regulatory documents, Forbes reporting on financial regulations, and public statements by Treasury officials regarding Minnesota investigations between 2020 and 2026.