Treasury Secretary Scott Bessent announced an aggressive new strategy Thursday to dismantle what federal officials describe as a massive fraud operation in Minnesota.
The plan centers on financial incentives designed to encourage participants in the scheme to provide information about their co-conspirators.
During an appearance on Fox News, Bessent outlined the government’s multipronged approach.
The strategy aims to recover stolen taxpayer funds, prosecute individuals involved in the social services fraud, prevent similar crimes from occurring and investigate whether comparable schemes exist in other states.
The treasury secretary revealed plans to offer whistleblower payments to anyone willing to share detailed information about the fraud’s operation.
Officials want specifics about participant identities, money movement and the timing of key decisions throughout the scheme’s operation.
Bessent expressed confidence that participants would betray one another for financial gain.
He cited a recent case involving a convicted fraudster who received $200,000 intended as a juror bribe but kept $80,000 for herself, attempting to pass along only $120,000.
“We know that these rats will turn on each other,” Bessent said during the interview.
“So we are going to offer whistleblower payments to anyone who wants to tell us who, what, when, where, and how this fraud has been done. And I think that that will give us a great report on how to get it done.”
WATCH:
The announcement follows growing attention to questionable child-care operations across Minnesota.
YouTuber Nick Shirley documented his findings in a Dec. 26 video after visiting ten Minnesota child-care facilities.
The locations, operated by Somalis and listed as recipients of taxpayer funding, showed little evidence of actual operation.
Shirley’s investigation revealed vacant lots and closed locations at addresses where child-care centers supposedly conducted business.
His recordings captured the absence of children, staff, or any signs of legitimate child-care activities at multiple sites.
Federal prosecutors have brought separate charges against more than 90 individuals in connection with the broader fraud investigation.
Most defendants have ties to Minnesota’s Somali community.
Authorities allege these individuals diverted over $9 billion from government social service programs.
Five specific operations drew nearly $5 million through the program between 2018 and 2021, according to reporting by the Minnesota Star Tribune.
Minnesota Best Childcare Center alone collected approximately $1.5 million during this period.
Another facility, Sweet Angel Child Care in Minneapolis, raised additional questions when investigators discovered its listed phone number matched the one used by Democratic Governor Tim Walz’s office, per social media reports.
The connection prompted further scrutiny of oversight failures.
State employees came forward in November with accusations against the Walz administration. These whistleblowers claimed the governor bore direct responsibility for allowing the misconduct to continue unchecked.
They accused his administration of ignoring internal warnings and dismissing concerns raised by whistleblowers.
As the investigation expanded, Democratic officials and state leaders mounted public defenses of Somali residents, according to the Daily Caller.
Minneapolis Mayor Jacob Frey, a Democrat, characterized the Somali community as integral to the city’s fabric.
Minnesota Lieutenant Governor Peggy Flanagan, also a Democrat, appeared on Somali-language television wearing a hijab.
Her appearance came as investigators continued uncovering details about the fraud scheme.
The scope of the alleged fraud has drawn national attention to Minnesota’s oversight of social service programs.
Questions persist about how such large sums could be diverted without detection for multiple years.
Bessent’s whistleblower strategy represents a departure from traditional prosecution methods.
By offering financial rewards for cooperation, officials hope to accelerate the investigation and identify all participants in the scheme.
The approach also signals federal determination to pursue similar cases in other jurisdictions if evidence emerges of comparable fraud operations.
