The federal government is stepping up its response to alleged government benefits fraud in Minnesota.
During a visit to the Twin Cities this month, Treasury Secretary Scott Bessent outlined a broad enforcement effort that includes new investigations, expanded audits, and the use of a little-used enforcement order that requires banks to report more transaction data.
The Geographic Targeting Order, or GTO is a temporary directive issued by the Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN. Best known to taxpayers as the agency that processes Foreign Bank Account Reports (FBARs), FinCEN oversees the federal government’s anti–money laundering system and has the authority to require additional financial reporting when it believes criminal activity is happening in a specific area.
In this case, the GTO targets Hennepin and Ramsey Counties, which include Minneapolis and St. Paul. It focuses on international money transfers of $3,000 or more. Beginning February 12, 2026, banks and money transmitters in those counties must collect and report extra information on certain outbound transfers, particularly when the recipient is located outside the United States.
The order is part of a broader set of actions unveiled by Treasury. Those include investigations of Minnesota-based money services businesses, enhanced IRS audits, more law enforcement training, and a formal alert warning banks about fraud tied to federal child nutrition programs. The moves signal a much tougher federal approach to benefits fraud—and a willingness by the Trump administration to use GTOs beyond their traditional role.
What Is a Geographic Targeting Order?
GTOs are one of FinCEN’s most flexible tools for fighting crime. Under the Bank Secrecy Act (BSA), Treasury can temporarily require extra financial reporting in specific locations when it suspects illegal activity.
In recent years, GTOs have also been used to track suspected money laundering related to real estate and near the southern border.
Unlike permanent regulations, GTOs are short-term—usually lasting 180 days—though they can be renewed (those at the border have been modified and extended). They are also narrowly targeted, applying only to certain counties or cities and to specific types of transactions. That makes them appealing to policymakers looking for quick results without a lengthy rule-making process.
Despite the ease, they’re typically used sparingly. From 2020 to 2024, Treasury issued about two per year—in 2025, Treasury issued three.
In Minnesota, the new GTO requires banks and money transmitters in Hennepin and Ramsey Counties to report additional information on certain outbound international transfers of $3,000 or more. Treasury says the goal is simple: follow the money once it leaves the United States.
Why Minnesota—and Why Now?
According to Treasury, complex fraud rings operating in Minnesota siphoned billions of dollars from state and federal programs meant to serve children, seniors, and families in need. The schemes allegedly exploited benefits programs designed to provide food, housing, and social services.
Federal officials say the money did not stay in Minnesota. Instead, they allege it was laundered through financial institutions and sent abroad, where it was used to buy real estate, luxury vehicles, international travel, and other high-end goods.
Still, the decision to make Minnesota the focus of such an aggressive federal response cannot be explained by enforcement concerns alone. Politics almost certainly played a role.
Minnesota is led by Democratic Governor Tim Walz, a vocal critic of President Trump. Trump has frequently pointed to Democratic-led states as examples of government mismanagement. Casting the fraud as the result of poor or negligent oversight under Walz fits squarely within that narrative.
Minnesota is also home to one of the largest Somali communities in the United States. While some of the alleged fraud schemes involved Somali-linked networks, critics argue that the administration’s rhetoric risks conflating crime with an entire community. In December 2025, Trump referred to some Somali immigrants as “garbage” and said he did not want them in the United States, remarks that drew sharp criticism from civil rights advocates and local leaders.
Bessent’s comments reflect this dual framing. “President Trump has instructed the administration to bring accountability for the hardworking people of Minnesota,” he said, placing responsibility on state leadership and accusing officials of allowing billions intended for vulnerable populations to be diverted elsewhere, including out of the country.
Whether you agree with the framing or not, Treasury’s stance is familiar to financial crime investigators for a good reason: Once money leaves the United States, it becomes much harder to determine who actually received the stolen funds—and even harder to recover them.
Lower Thresholds, Higher Scrutiny
Banks and money services businesses already have obligations to monitor and report suspicious activity. But standard reporting thresholds can limit what investigators see, especially when bad actors break large sums into smaller transactions to avoid detection.
Currently, financial institutions, including banks, must file Currency Transaction Reports (CTRs) when they accept $10,000 or more in cash in a single day. The term “cash” typically means money. Money can mean currency and coins of the United States and any other country. Cash can also include certain monetary instruments like a cashier’s check, bank draft, traveler’s check, or money order.
A CTR includes details about the person involved in the transaction, including their name, address, and taxpayer identification number. A CTR also contains information about the date, amount, and kind of the transaction.
After the CTR has been submitted, FinCEN collects and maintains the information, and authorized law enforcement and other agencies can use it to investigate and prosecute illicit finance activities.
It is not illegal to deal in cash—even if those dollars are significant. The idea of reporting large transactions that enter the country (via a FinCEN 105), are deposited or exchanged at banks or other financial institutions (via FinCEN 104), or are received in the course of a trade or business (via Form 8300) is to ensure that those dollars are properly reported and taxed. Money that is “dirty,” meaning that it was from illegal sources, is more difficult to circulate and exchange for “clean” money if reported. Similarly, it’s easier to ensure that funds are reported to the taxation authorities, if appropriate, when taxpayers are aware that the feds know that those funds exist.
That $10,000 threshold isn’t an absolute bottom limit. If a financial institution has reason to believe that a transaction was out of the ordinary, even if it’s for a much smaller amount of money, they must file a suspicious activity report (SAR). That includes structuring—when you break down really large transactions into smaller ones. For example, if you had $100,000 in “bad” funds that you wanted to get rid of, rather than putting it all in at once, you might break it down into 11 deposits of $9,091 to avoid being reported. Doing that with an intent to evade reporting is illegal.
The Minnesota GTO is intended to make it easier for investigators to see what’s happening by requiring extra reporting on relatively modest international transfers—$3,000 or more—when the recipient is located outside the United States. Treasury believes many fraud rings deliberately structure transactions this way, moving large amounts of money over time while staying below traditional thresholds.
By pulling together transaction data from multiple banks and counties, FinCEN hopes to spot patterns that would otherwise be missed, such as repeat overseas recipients, frequent use of the same money transmitters, or coordinated activity across multiple accounts.
Treasury officials say this information will be shared with federal, state, and local law enforcement to speed up investigations, support prosecutions, and recover stolen funds.
A Broader Enforcement Push
The GTO is only one part of a larger enforcement strategy. FinCEN has issued four notices of investigation to Minnesota-based money services businesses, requesting records under federal anti–money laundering laws. These businesses operate outside the traditional banking system and can move money quickly across borders, making them both useful for legitimate transactions and attractive to criminal networks.
The IRS is also stepping up its role. Treasury says IRS auditors are examining financial institutions that may have helped move or hide illicit funds and are preparing to launch a task force focused on fraud involving pandemic-era tax incentives and misuse of nonprofit tax exemptions.
According to the feds, many of the alleged schemes involved organizations claiming to operate as charities or social service providers. By presenting themselves as nonprofits, fraudsters can gain credibility, access public funds, and face less scrutiny—at least initially. Treasury says it will go after nonprofits being used to commit fraud (how that strategy might differ from what’s already in place isn’t clear).
Fraudulent Child Nutrition Programs
Last weekend, FinCEN issued a formal alert warning financial institutions about fraud tied to federal child nutrition programs. According to Treasury, at least $300 million intended to feed children in Minnesota was diverted through these schemes.
The alert urges banks to watch for warning signs, including unusual transfers involving nonprofits, rapid movement of funds into personal accounts, spending that doesn’t match a charity’s stated mission, or international wire transfers with no clear purpose. The message is clear: missing these red flags could bring regulatory scrutiny.
Part of a Larger Pattern
The Minnesota GTO fits within a broader Trump administration strategy. Over the past year, Treasury has increasingly relied on GTOs to address what it views as urgent threats, including cash activity near the southern border.
Supporters argue GTOs give federal authorities an edge as criminal schemes evolve faster than traditional regulations. Critics counter that they expand financial surveillance and impose heavy compliance burdens on local institutions, often with little warning.
What Comes Next
The Minnesota GTO is temporary, but it could be (and likely will be) renewed. It could also have a lasting impact.
If Treasury and FinCEN succeed in identifying overseas recipients and tying them back to domestic fraud networks, prosecutors may gain traction in these kinds of cases. The move also sends a broader signal that banks, nonprofits, and state agencies should expect closer scrutiny.
Whether this approach actually leads to recovered funds, deterrence, or simply more controversy remains to be seen. For now, Minnesota has become a test case for how far—and how fast—the federal government is willing to go.
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