U.S. Department of the Treasury issues FinCEN geographic targeting order for USD 3,000 cross border transfers to combat Minnesota benefits fraud

The U.S. Department of the Treasury announced a package of enforcement and supervisory initiatives aimed at disrupting Minnesota-based government benefits fraud schemes, centered on expanded financial reporting, targeted inquiries into money services businesses, and stepped-up collaboration with law enforcement and financial institutions. Treasury’s Financial Crimes Enforcement Network (FinCEN) issued four notices of investigation to Minnesota money services businesses under the Bank Secrecy Act and imposed a Geographic Targeting Order covering banks and money transmitters in Hennepin and Ramsey Counties, requiring additional reporting on certain funds transferred outside the United States. Under the order, covered institutions must file reports with FinCEN for transactions of USD 3,000 or more where the beneficiary is located outside the United States. FinCEN also published an alert urging financial institutions to identify and report fraud linked to Federal child nutrition programs, citing at least USD 300 million in losses in Minnesota and providing red flags to support detection and reporting. On the tax and nonprofit side, the Internal Revenue Service is auditing financial institutions that facilitated laundering of Minnesota-linked funds and will soon announce a task force to investigate fraud and abuse involving pandemic-era tax incentives and misuse of 501(c)(3) tax-exempt status by entities implicated in the schemes. Treasury also indicated Secretary Scott Bessent will hold a roundtable with affected citizens and chair a public-private partnership meeting with financial institutions and Federal, state, and local law enforcement to support information sharing and investigations.