Billions Missing in Taxpayer Funds Earmarked for Needy Americans, Much Laundered to Somalia Terrorist Network
An investigation that began with individuals arrested for fraud in Minnesota has exposed a global money-laundering network that has become the most expansive of its kind in American history.
Since mid-2025, investigations into Somali-based fraud in Minnesota have grown exponentially. Federal agents have uncovered a sprawling scheme involving government-funded nonprofits, fake daycare centers, and housing programs that existed only on paper. The scale is staggering: stolen funds are now estimated in the 10s of billions of dollars.
The alleged fraud concentrated heavily in immigrant Somali communities in Minnesota, but has since stretched far beyond the state's borders. Investigators are tracing money through international networks with ties to terrorist organizations in Africa. Some stolen welfare funds were allegedly routed through informal money transfer systems and ended up in regions controlled by al-Qaeda-affiliated Al Shabaab, a U.S. designated terrorist group.
(Below) Fox News correspondent Jeff Paul reports on allegations that Minnesota tax dollars were diverted to a terror group operating in Somalia.
Who Is Al Shabaab?
Al Shabaab is a Somalia-based terrorist organization affiliated with Al-Qaeda, responsible for thousands of deaths through suicide bombings and mass attacks. The group seeks to overthrow Somalia's Federal Government, expel foreign forces from the country, and establish a fundamentalist Islamic state based on their interpretation of Sharia law. Al Shabaab is considered al-Qaeda's wealthiest component and has killed more U.S. citizens than any other al-Qaeda affiliate since 2014. The U.S. has designated it a terrorist organization.
Uncovering Minnesota’s Massive Money Laundering Network
Fraud involving government-funded nonprofits in Minnesota first made headlines in early 2022 with the Feeding Our Future scandal. In late January, 2022, the FBI executed search warrants at the St. Anthony nonprofit and related sites amid allegations it misused federal pandemic-era child nutrition funds, a case that grew into a more than $250 million scheme.
The fallout widened quickly: indictments began in September 2022 with 47 people charged, trials continued into 2024 and 2025, and by late 2025 investigators were also probing fraud in other programs, including housing and autism services.
Feeding Our Future Trial Snapshot
Minnesota’s nonprofit fraud crisis burst onto the national radar through the Feeding Our Future case, which has unfolded in waves.
- First major federal trial: April 22 to June 7, 2024, with five convictions and two acquittals.
- Juror bribery shock: prosecutors disclosed an alleged $120,000 cash bribery attempt, prompting tighter courtroom security and a separate criminal track.
- Sentencings begin: fall 2024, including a 12 year federal prison term for the first defendant sentenced.
- Leadership verdict: March 19, 2025, a jury found Aimee Bock and Salim Said guilty after a six week trial.
At least seven defendants have been convicted so far in the Feeding Our Future case, with additional guilty pleas and sentencings continuing as the broader investigation unfolds.
The White House Steps In
At the beginning of December, as alleged losses to fraud in Minnesota climbed into the billions, President Trump addressed the scandal publicly.
In a statement, the President called Minnesota “a hub of fraudulent money laundering activity,” and the fraud was a betrayal of public trust. Federal agencies, the President said, would follow the money wherever it leads and ensure that every stolen dollar is clawed back.
The fraud had become a national priority, not just a regional problem. Federal agencies began coordinating across jurisdictions, using tactics typically reserved for complex international investigations.
President Donald Trump has publicly addressed the Minnesota fraud scandal, directing federal authorities to pursue prosecutions and recover funds tied to large scale money laundering.
On November 12, President Trump wrote on Truth Social:
"Minnesota, under Governor Waltz, is a hub of fraudulent money laundering activity. I am, as President of the United States, hereby terminating, effective immediately, the Temporary Protected Status (TPS Program) for Somalis in Minnesota. Somali gangs are terrorizing the people of that great State, and BILLIONS of Dollars are missing. Send them back to where they came from. It’s OVER! President DJT"
How Stolen Welfare Funds Reached Terror Networks
In November, one City Journal report by journalists Ryan Thorpe and Christopher Rufo provided chilling details about where the money actually went.
What began as straightforward welfare fraud evolved into something far darker: a pipeline of funds moving through trusted community intermediaries and ultimately landing in regions controlled by Al Shabaab.
The report described money laundering through the Feeding Our Future welfare organization:
“Federal counterterrorism sources confirm that millions of dollars in stolen funds have been sent back to Somalia, where they ultimately landed in the hands of the terror group Al-Shabaab. As one confidential source put it: ‘The largest funder of Al-Shabaab is the Minnesota taxpayer.’”
and,
“...the money was being used to fund lavish lifestyles, purchase luxury vehicles, and buy real estate in the United States, Turkey, and Kenya. In 2020, Minnesota officials raised concerns about the nonprofit’s rapid expansion. In response, the group filed a lawsuit alleging racial discrimination related to outstanding site applications, noting that Feeding Our Future “caters to . . . foreign nationals.’”
The report went on to cite federal sources saying the scheme funneled more money to Somalia than the country’s annual budget:
“The Somali fraud rings have sent huge sums in remittances, or money transfers, from Minnesota to Somalia. According to reports, an estimated 40 percent of households in Somalia get remittances from abroad. In 2023 alone, the Somali diaspora sent back $1.7 billion—more than the Somali government’s budget for that year.
“Our investigation reveals, for the first time, that some of this money has been directed to an even more troubling destination: the al-Qaida-linked Islamic terror group Al-Shabaab. According to multiple law-enforcement sources, Minnesota’s Somali community has sent untold millions through a network of ‘hawalas,’ informal clan-based money-traders, that have wound up in the coffers of Al-Shabaab.”
Nick Shirley’s Daycare Investigation Reaches the FBI Director’s Desk
In late December, video journalist Nick Shirley visited several state-funded daycare centers in Minnesota. What he found shocked him: no children present during operating hours. His footage spread rapidly online, prompting serious questions that authorities could no longer ignore.
Nick Shirley is an independent journalist whose on-the-ground reporting exposed empty, taxpayer-funded daycare centers in Minnesota’s Somali community. His work helped trigger broader investigations into a massive nonprofit fraud network.
(Below) Independent journalist Nick Shirley documents visits to taxpayer-funded daycare centers in Minnesota that appeared to be operating without children. This video raised serious questions with DOJ and FBI investigators.
Shirley wasn't done. When he tried to ask staff at another facility how many children were enrolled, they called the local police on him and he was trespassed from the property. That encounter, captured on video, only amplified suspicions that something was being deliberately hidden.
(Below) Independent journalist Nick Shirley has police called on him after asking daycare operators about their rates.
The fraud exposed in Minnesota spans multiple Health and Human Services programs, cutting across several state agencies and offices responsible for childcare, Medicaid, housing, and disability services. Investigators say the breadth of the schemes reflects systemic breakdowns in oversight rather than isolated failures within a single department.
(Below) This KARE 11 investigation reveals how Minnesota’s Housing Stabilization Services program was exploited through fake companies and fraudulent Medicaid billing.
Minnesota Governor Tim Walz’s Record Under the Microscope
Governor Tim Walz is facing mounting questions about why state agencies failed to stop obvious red flags in taxpayer-funded programs. On December 3rd, James Comer, chairman of House Committee on Oversight and Government Reform, launched an investigation into the widespread fraud. Comer claims Minnesota officials undertook an effort to cover up the fraud and retaliated against whistlebowers who reported crimes. He was quoted,
"The Committee on Oversight and Government Reform is investigating reports of widespread fraud in Minnesota’s social services programs. The Committee has serious concerns about how you as the Governor, and the Democrat-controlled administration, allowed millions of dollars to be stolen. The Committee also has concerns that you and your administration were fully aware of this fraud and chose not to act for fear of political retaliation. The Committee therefore requests documents and communications showing what your administration knew about this fraud and whether you took action to limit or halt the investigation into this widespread fraud."
Tim Walz, Governor of Minnesota, is ultimately responsible for overseeing state agencies and administering social programs funded by federal and state dollars. As investigations into money laundering crimes expand, his administration has come under increased scrutiny over oversight failures with NGOs.
On December 12, Governor Walz announced the launch of a fraud prevention program for Minnesota. Walz has pointed to reforms now underway. He hired former FBI agent Tim O’Malley to lead program integrity while launching a statewide partnership with WayPoint, Inc.
In the governor's press release, WayPoint is described as a
"Minnesota-based professional service firm of former law enforcement and federal special agents, specializing in forensic accounting, financial investigations, due diligence, business risk mitigation, health care compliance and investigations, and tax litigation support."
Pam Bondi Issues Update as Investigations Accelerate
Following Nick Shirley’s daycare reporting, U.S. Attorney General Pam Bondi publicly acknowledged the breadth of the fraud unfolding in Minnesota. In a post on X shared shortly after Shirley’s video went viral, Bondi said federal authorities were actively investigating widespread fraud tied to state-funded programs and emphasized that prosecutions were already underway, with more expected.
Bondi’s statement marked one of the clearest acknowledgments from the Justice Department that Minnesota’s situation was not isolated to a single case or agency. She specifically mentioned four cornerstone scams.
Pam Bondi, the U.S. Attorney General, leads the Justice Department and oversees federal investigations nationwide. In the Minnesota fraud probe, the DOJ has already prosecuted defendants tied to alleged money laundering and jury bribery, and continues pursuing additional cases.
Scam 1: Feeding Our Future, The Largest COVID-19 Fraud Case Charged in the U.S.
The largest case the Justice Department has pursued so far is Feeding Our Future, a Minnesota nonprofit prosecutors have described as the biggest COVID-era fraud charged in the country. The group claimed it served millions of free meals during the pandemic, but investigators say most meals were never provided.
Federal filings allege the operation ran on fake invoices, falsified kid rosters, and shell companies used to justify huge reimbursements. So far, 78 defendants have been charged and 57 convicted. Court records also show 72 defendants are of Somali descent, five are fugitives believed to be in Africa, and millions of dollars were sent to East Africa and the Middle East.
Federal estimates put the loss at $300 million to $400 million, cementing the case as one of the most significant public-program scandals in modern U.S. history.
Scam 2: Juror Bribery, An Attempt to Corrupt the Federal Trial
As the Feeding Our Future case neared verdicts, it's alleged some defendants tried to corrupt the process itself. Federal authorities allege a cooperating witness was intimidated and jurors were targeted.
Charging documents say three people delivered a bag with $120,000 in cash to a juror’s home the night before closing arguments, promising more money for votes to acquit all seven trial defendants.
Prosecutors also say the pitch leaned on resentment, quoting the group as saying, “We are immigrants; they don’t respect or care about us.” The juror reported it immediately, triggering tighter security and a separate federal case that added new indictments and convictions.
(Below) An inside look at the alleged juror bribery plot that stunned the Feeding Our Future trial.
Scam 3: Autism Treatment Medicaid Scheme
Federal investigators say many of the same players tied to Feeding Our Future also exploited Minnesota’s Medicaid-funded autism treatment programs. Charging documents and investigative reporting describe sham “autism clinics,” sometimes run out of daycare sites repackaged as medical providers.
Parents in the Somali community later told authorities their children were improperly diagnosed and enrolled, at times with kickbacks involved, while providers billed Medicaid for intensive therapy that was never delivered.
State officials said costs spiraled far beyond projections: a program expected to run about $20 million ballooned to nearly $200 million, with taxpayers absorbing the losses.
Scam 4: Medicaid Housing Stabilization Fraud
Federal prosecutors have also targeted abuse within Minnesota’s Medicaid-funded Housing Stabilization Services program, created to support people with disabilities, seniors, and those with mental illness. Investigators say fraudsters quickly identified the program as vulnerable.
Charging documents and state audits allege defendants set up sham LLCs, enrolled residents of halfway houses for services never provided, and billed Medicaid for ongoing care.
The costs exploded. A program projected at $2.6 million per year surged to about $125 million annually, largely due to weak oversight, according to federal authorities.
FBI Director Warns Minnesota Fraud Case Is “Tip of the Iceberg”
On Dec. 28, FBI Director Kash Patel said Minnesota is now a top FBI priority, and that agents and resources were surged into the state even before the issue went viral online. He said the bureau will keep targeting schemes that steal from taxpayers and exploit children.
Patel summarized many of the points AG Bondi made, but added that FBI investigators believe they are still only seeing the tip of a much larger iceberg, with more cases and referrals still coming.
Director of the FBI, Kash Patel, oversees federal law enforcement operations and major criminal investigations nationwide. After Nick Shirley's daycare report was published, Patel said the Bureau was already scaling up investigative efforts in Minnesota.
Kash Patel's statement via X:
"CASE UPDATE: MINNESOTA FRAUD SCHEME
"The FBI is aware of recent social media reports in Minnesota. However, even before the public conversation escalated online, the FBI had surged personnel and investigative resources to Minnesota to dismantle large-scale fraud schemes exploiting federal programs. Fraud that steals from taxpayers and robs vulnerable children will remain a top FBI priority in Minnesota and nationwide.
"To date, the FBI dismantled a $250 million fraud scheme that stole federal food aid meant for vulnerable children during COVID. The investigation exposed sham vendors, shell companies, and large-scale money laundering tied to the Feeding Our Future network.
"The case led to 78 indictments and 57 convictions. Defendants included Abdiwahab Ahmed Mohamud, Ahmed Ali, Hussein Farah, Abdullahe Nur Jesow, Asha Farhan Hassan, Ousman Camara, and Abdirashid Bixi Dool, each charged for roles ranging from wire fraud to money laundering and conspiracy.
"These criminals didn’t just engage in historic fraud, but tried to subvert justice as well. Abdimajid Mohamed Nur and others were charged for attempting to bribe a juror with $120,000 in cash. Those responsible pleaded guilty and were sentenced, including a 10-year prison term and nearly $48 million in restitution in related cases.
"The FBI believes this is just the tip of a very large iceberg. We will continue to follow the money and protect children, and this investigation very much remains ongoing.
"Furthermore, many are also being referred to immigration officials for possible further denaturalization and deportation proceedings where eligible."
How to Report Suspected Childcare Fraud
Federal and state officials are urging the public to report suspected childcare misconduct as investigations widen. Parents, providers, and community members who believe a daycare is inflating enrollment, billing for services not provided, or violating licensing rules can submit tips through ChildCare.gov.
On December 30th, Attorney General Bondi shared another way to report large-scale fraud. She stated:
There have been reports of large-scale fraud schemes infesting Minnesota and spreading across our country. We will not tolerate fraud from anyone, and we will uproot those attempting to take advantage of Missourians.
If you know of a business, program, or fraudster stealing hard-earned taxpayer dollars, report it immediately to our hotline at 800-392-8222.
(Below) Health and Human Services (HHS) Deputy Secretary Jim O'Neill and HHS Assistant Secretary Alex Adams give a public service announcement on how the public can report childcare fraud from anywhere in the U.S.
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