By David Lawder
SAVAGE, Minnesota, Jan 9 () – The U.S. Treasury Department’s initiative to enhance oversight of international money transfers should not affect individuals who can demonstrate that the funds were not sourced from social service payments, U.S. Treasury Secretary Scott Bessent stated on Friday.
Bessent stated on Friday that the Treasury’s Financial Crimes Enforcement Network (FinCEN) is examining certain money services businesses as part of an effort to address misuse of federal social benefits in Minnesota, while some banks will undergo reviews by the Internal Revenue Service concerning suspected money laundering activities.
FinCEN also issued a geographic order that intensifies oversight of banks and money transmitters in Hennepin and Ramsey counties, Minnesota. This will require companies to provide more details on international fund transfers, including FinCEN reports for transactions exceeding $3,000.
When asked if this would have a deterrent effect on legal remittances sent by migrants to their families abroad, Bessent responded, “No, it shouldn’t. Anyone who can demonstrate the source of the funds… is okay,” during an interview following a visit to the Minneapolis-area engineering facility of Winnebago Industries, a manufacturer of recreational vehicles and boats.
Bessent mentioned that funds from individuals who are legally in the United States are typically sent through the official banking system. “You can’t transfer welfare money from Minnesota residents to Somalia, can you? That would mean you’re receiving too much, or you can’t send stolen funds.”
Large portions of the gross domestic product in numerous developing countries, such as El Salvador and Somalia, come from remittances. Minnesota Governor Tim Walz, a Democrat running for vice president in the 2024 election, recently stated he will not pursue a third term and will instead concentrate on allegations of state welfare fraud that have escalated into a major issue following increasing criticism from the Republican administration led by former U.S. President Donald Trump.
The administration of Trump has specifically targeted Walz and Minnesota, including its significant community of Somali Americans and Somali immigrants, due to accusations of fraud that originated in 2020 involving certain nonprofit organizations that manage the state’s childcare and other social service programs, which receive federal support.
At least 56 individuals have admitted guilt since federal authorities began filing charges in 2022 during the tenure of Trump’s Democratic predecessor, Joe Biden.
(Contributed by David Lawder, composed by Andrea Shalal, edited by Chris Reese)