The federal government is intensifying its crackdown on alleged benefits fraud in Minnesota through a new financial reporting order. Treasury Secretary Scott Bessent announced during a Twin Cities visit that the administration will deploy a Geographic Targeting Order requiring enhanced transaction reporting in the state’s two largest counties, marking an escalating federal response to what officials describe as billions of dollars in stolen government benefits.
The Geographic Targeting Order, or GTO, takes effect February 12, 2026, and targets Hennepin and Ramsey Counties, which include Minneapolis and St. Paul. According to the Treasury Department, the directive requires banks and money transmitters to report additional information on international transfers of $3,000 or more when recipients are located outside the United States.
Understanding the Geographic Targeting Order
GTOs are temporary enforcement tools issued by the Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN. Under the Bank Secrecy Act, Treasury can require extra financial reporting in specific locations when it suspects illegal activity is occurring.
These orders typically last 180 days, though they can be renewed. Unlike permanent regulations, GTOs apply only to certain counties or cities and specific transaction types, allowing policymakers to act quickly without lengthy rule-making processes.
However, they have historically been used sparingly. From 2020 to 2024, Treasury issued approximately two GTOs per year. In 2025, the agency issued three, signaling a shift in enforcement strategy under the Trump administration.
Allegations of Widespread Benefits Fraud
According to Treasury officials, complex fraud networks operating in Minnesota allegedly diverted billions of dollars from state and federal programs intended to serve children, seniors, and families in need. The schemes reportedly exploited benefits programs designed to provide food, housing, and social services.
Federal investigators allege that stolen funds were laundered through financial institutions and sent abroad, where they were used to purchase real estate, luxury vehicles, and other high-end goods. FinCEN issued a formal alert last weekend warning financial institutions about fraud tied to federal child nutrition programs, noting that at least $300 million intended to feed children in Minnesota was diverted.
The alert urges banks to watch for warning signs including unusual transfers involving nonprofits, rapid movement of funds into personal accounts, and international wire transfers with no clear purpose. Additionally, Treasury has issued four notices of investigation to Minnesota-based money services businesses, requesting records under federal anti-money laundering laws.
Lower Reporting Thresholds for International Transfers
Currently, financial institutions must file Currency Transaction Reports when they accept $10,000 or more in cash in a single day. Banks must also file suspicious activity reports when they believe transactions are out of the ordinary, even for smaller amounts.
The Minnesota Geographic Targeting Order lowers the threshold significantly for international transfers to $3,000 or more. Treasury believes many fraud rings deliberately structure transactions below traditional thresholds, moving large amounts of money over time while avoiding detection.
By collecting transaction data from multiple banks and counties, FinCEN aims to identify patterns that would otherwise be missed. Treasury officials say this information will be shared with federal, state, and local law enforcement to speed up investigations and support prosecutions.
Political Context and Criticism
Minnesota is led by Democratic Governor Tim Walz, a vocal critic of President Trump who served as Vice President Kamala Harris’s running mate. The Trump administration has frequently pointed to Democratic-led states as examples of government mismanagement.
In contrast to purely enforcement-driven explanations, critics argue that politics played a role in targeting Minnesota. Secretary Bessent stated that “President Trump has instructed the administration to bring accountability for the hardworking people of Minnesota,” placing responsibility on state leadership.
Minnesota is also home to one of the largest Somali communities in the United States. While some alleged fraud schemes involved Somali-linked networks, critics contend that the administration’s rhetoric risks conflating crime with an entire community. In December 2025, President Trump referred to some Somali immigrants as “garbage,” remarks that drew sharp criticism from civil rights advocates.
Broader Enforcement Strategy
The GTO is part of a larger enforcement push that includes IRS audits of financial institutions that may have moved or hidden illicit funds. The IRS is preparing to launch a task force focused on fraud involving pandemic-era tax incentives and misuse of nonprofit tax exemptions.
Meanwhile, Treasury says many alleged schemes involved organizations claiming to operate as charities or social service providers. By presenting themselves as nonprofits, fraudsters allegedly gained credibility and access to public funds while facing less scrutiny.
The Minnesota action fits within a broader Trump administration pattern of using GTOs to address perceived urgent threats. Over the past year, Treasury has increasingly relied on these orders, including for monitoring cash activity near the southern border.
The Minnesota Geographic Targeting Order is temporary but could be renewed beyond its initial 180-day term. Whether this enforcement approach leads to recovered funds and successful prosecutions or generates primarily controversy remains uncertain as federal authorities expand their investigation.
