Embezzled Funds Ended up in Hands of Terror Group, Feds Say
Almost 60 people have been convicted in a massive fraud scandal in Minnesota, in which the defendants—many from the large Somali community in Twin Cities—were accused of stealing more than a billion dollars from the government for fictitious food programs and social services.
Over half of the defendants have pled guilty, a NY Post article said.
The scandal exploded onto the national stage in recent weeks, with Congress now probing how corruption on such a sweeping scale could have gone undetected under Dem. Gov. Tim Walz’s administration.
According to the Post article, fraudsters targeted Minnesota’s generous HHS social services department during the past five years. Through a scam called Feeding Our Future and other fictitious companies, they billed the state for food and services they claimed to have provided for tens of thousands of children.
The perpetrators are alleged to have embezzled millions from taxpayers particularly during the Covid-19 pandemic. Using fake meal counts, doctored attendance records, and fabricated invoices, the fraud ring claimed to be serving thousands of meals a day, seven days a week, to underprivileged children.
In 2021, Feeding Our Future alone received about $250 million in funding. In reality, the money was being used to fund lavish lifestyles, purchase luxury vehicles, and buy real estate in the United States, Turkey, and Kenya, reports the NY Post.
Fear of Being Sued for ‘Racism’ Silenced Officials
In 2020, Minnesota officials raised concerns about the nonprofit’s skyrocketing growth and suspicious-looking invoices. To thwart efforts at auditing, the criminals filed a lawsuit alleging racial discrimination and bigotry. The gambit succeeded in intimidating officials and shutting down the audit.
“That’s the standard operating playbook: when faced with scrutiny, cry “Racism!” says David Gaither, a former Minnesota state senator, quoted in City Journal, the key media outlet that broke the explosive story.
Gaither believes the mainstream media, along with Minnesota’s Democratic establishment, have deliberately ignored fraud within the Somali community, out of fear of losing a crucial voting bloc by investigating it. That silence allowed the corruption to flourish.
“If you’re a politician, it’s a significant disadvantage for you to alienate the Somali community,” Gaither said. “If you don’t win the Somali community, you can’t win Minneapolis. And if you don’t win Minneapolis, you can’t win the state. End of story.”
“These were sophisticated criminal enterprises that exploited Minnesota’s generous welfare state,” City Journal detailed. When auditors wanted to investigate, “the fraudsters deployed baseless accusations of ‘racism’ against Somalis [who are black], to shield criminal behavior. And they looted the public treasury until local prosecutors did the hard work to bring them down.”
The scam artists shrewdly cultivated close ties with Minnesota’s elected officials. Several individuals involved in the Feeding Our Future scheme made campaign donations to, or appeared publicly with Ilhan Omar, the Somali-born congresswoman from Minneapolis. In a mark of reciprocity, Omar’s aide, Ali Isse, advocated on behalf of Feeding Our Future, and Omar herself appeared in a video promoting the organization, the NY Post reported. [See Sidebar]
As federal prosecutors uncovered the full extent of the fraud, President Trump moved to cancel TPS (Temporary Protection Status) for Somali nationals –“effective immediately”—as part of a renewed crackdown on illegal immigration. The TPS program had allowed Somali nationals temporary legal status to live and work in the U.S. because of the dangerous conditions in the African country.
“Minnesota, under Governor [Tim] Walz, is a hub of fraudulent money laundering activity,” Trump posted online. He claimed that “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!”
Fraudulent Visa Applications
Gov. Walz came under blistering criticism during a cabinet meeting with President Trump last week, at which Homeland Security Secretary Kristi Noem revealed that half of all visa holders in Minnesota submitted “fraudulent” applications.
“You told me to look into Minnesota and their fraud on visas and their programs,” Noem told the president. “50% of them are fraudulent, which means that that Gov. (Tim) Walz is either mentally incompetent or he did it on purpose, or both. He brought people in there, illegally, that never should have been in this country, people that said they were somebody that they’re not. Or said they were married to somebody who turned out to be their brother or somebody else.”
Noem noted that those who submitted “fraudulent visa applications signed up for government programs, took hundreds of billions of dollars from the taxpayers, and we’re going to remove them and get our money back.”
Of at least 1,000 immigrant households in Minnesota that US Citizenship and Immigration Services (USCIS) visited during a two-week period, nearly half were engaged in some form of immigration fraud, the NY Post article said. USCIS Director Joseph Edlow told reporters afterwards that “officers encountered blatant marriage fraud, visa overstay, people claiming to work at businesses that can’t be found, forged documents, abuse of the visa system and many other discrepancies.”
Although Edlow did not specify the immigrants’ country of origin, Trump, in the same meeting, indicated they were from Somalia, saying that “these people come from Somalia, a broken country, and take advantage of our kindness. They’ve taken billions out of the country. They should go back where they came from.”
Stolen Funds Allegedly Flowed to Terrorists
What stands out about the Somalia fraud story is its enormous scale, with total costs running into billions of taxpayer dollars. The sheer scope of the fraud suggests it went toward more than luxury cars and real estate.
Federal counterterrorism sources confirm that millions of dollars in funds have been sent back to Somalia, where they ultimately landed in the hands of the Al Qaeda-linked terror group Al-Shabaab,” asserted reporters Ryan Thorpe and Chris Rufo in their bombshell City Journal report.
“Minnesota’s Somali community has sent untold millions through a network of hawalas, informal money-traders, that have wound up in the coffers of Al-Shabaab,” the report alleged.
The authors quote Glenn Kerns, a retired Seattle Police Department detective who spent 14 years on a federal Joint Terrorism Task Force (JTTF), and discovered that Somalis ran a sophisticated money network from Seattle to Somalia. He traced the routing of significant amounts of cash on commercial flights from the Seattle airport to the hawala networks in Somalia.
Kerns’s investigation eventually expanded to Minnesota, where he realized the same thing was happening, the City Journal report elaborated. He then investigated the hawalas in Somalia that were receiving the money transfers. The former JTTF expert alleges that significant funds were being sent from America to Al-Shabaab networks in Somalia. Whether the money was intended for Al-Shabaab or not, Kerns said, they were taking a cut.
A second former official, who worked on the Minneapolis JTTF and has studied the flow of funds from Minnesota to Somalia, confirmed Kearn’s findings to City Journal.
“Every scrap of economic activity in the Twin Cities, in America, throughout Western Europe, anywhere Somalis are concentrated, every cent that is sent back to Somalia benefits Al-Shabaab in some way,” the former official said. “For every dollar that is transferred from the Twin Cities back to Somalia, Al-Shabaab is taking a cut of it.”
Treasury Secretary Scott Bessent on Face the Nation last week confirmed that his department was investigating where the money from the Minnesota fraud scheme ultimately ended up. It was transferred through wire transfer organizations that operate outside the country’s regulated banking system, he said.
“That money has gone overseas, and we are tracking it both to the Middle East and to Somalia, to see how that money was and is being used,” Bessent said. He said the alleged diversion to Al-Shabaab occurred “under the feckless mismanagement of the Biden Administration and Governor Tim Walz.”
When asked on Face the Nation about proof that funding is going to terrorists, Bessent said, “That’s why it’s an investigation at this point. We’ll see where it goes, but I can tell you now that it looks terrible.”
Congress Turns Up the Heat on Walz
The City Journal’s explosive findings triggered a strong reaction in Washington, turning up the heat on Gov. Walz and his attorney general, Keith Ellison.
House Oversight Committee Chairman James Comer, R-Ky, fired off letters to both men last Wednesday, voicing the committee’s 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,” added the Republican chairman. He demanded “all 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.”
In his letter the same day to AG Ellison, Comer made a shocking charge. “[You were] caught on tape pledging to help Feeding Our Future fraudsters in a conversation that also included discussion of campaign donations from Somali community leaders to secure your donor base.”
“Only days later,” Comer’s letter continued, “you [Keith Ellison] and your son accepted contributions to your campaigns from the individuals in this meeting.” Based on these reports, Comer said, the Committee is concerned about conflicts of interest, and how that might have led to “negligence in overseeing taxpayer dollars that were ultimately stolen.”
“There is concern that you had systems in place that allowed the funds to be funneled to terrorist networks responsible for killing Americans,” Comer lashed out.
The Committee chairman also cited the allegation of whistleblowers that “DHS employees are destroying evidence,” adding a stern warning against the destruction of any and all pertinent records.
DHS Workers Accuse Walz of Retaliating Against Whistleblowers
Hundreds of state workers at the Minnesota Department of Human Services (DHS) publicly tore into Gov. Tim Walz last week for allowing a “massive fraud” scandal to unfold under his watch and retaliating against their whistleblowers, reported Fox News.
“Tim Walz is 100% responsible for massive fraud in Minnesota. We let Tim Walz know of fraud early on, hoping for a partnership in stopping fraud but no, we got the opposite response,” the Minnesota DHS website, which represents over 480 staffers, lashed out.
“Tim Walz systematically retaliated against whistleblowers using monitoring, threats, repression, and did his best to discredit fraud reports. Instead of partnership, we got the full weight of retaliation,” the account charged.
“This is a cascade of systemic failures leading up to Tim Walz,” the workers alleged. “We can’t fight fraud in Minnesota alone, hence why we’re appealing to the federal levels of government. We need all the help we can get.”
The New York Times gave the story national attention last week, noting that “the fraud that swamped Minnesota’s social services was staggering in its scale and brazenness,” and highlighting in the article’s title that “it happened on Tim Walz’s watch.”
Outrage over the rampant theft has turned the fraud into a “potent political issue in a competitive campaign season,” the article emphasized. It has even Walz’s longtime allies wondering if the governor should walk away from a reelection bid for a third term as governor.
“The governor, I think, has done a very respectable job in Minnesota for the years that he’s been here. But he clearly is vulnerable and in my view, he is riskier than any Democratic candidate that might run,” said Ember Reichgott Junge, a former Minnesota Democratic state senator and a political analyst in the state.
She noted that the governor is taking steps to rectify it, including audits, but predicted that those investigations will “probably uncover more crime… and the scandal will continue to make headlines every other day.”
*****
Fraud Convictions of Friends Cast Shadow on Rep. Ilhan Omar
Most of the large-scale fraud rings now engulfing Minnesota, according to two former FBI officials who spoke with City Journal, have been perpetrated by members of the Somali community.
Members of the inner circle of Somalia-born Ilhan Omar, D-Minn., personally profited from the $1 billion welfare fraud scandal in her district “that has placed her Somali constituency under a White House microscope,” reported Fox News.
Omar held events and parties at one of the restaurants named in the scam, was friendly with one of its now-convicted owners and employed a staffer who was also convicted, the New York Post reported.
Around $250 million in state funds was distributed beginning in 2020 to provide meals to schoolchildren during the pandemic shutdowns. The money was allegedly pocketed, however, by crooked businessmen including Salim Ahmed Said, the co-owner of Safari Restaurant, where Omar held her 2018 congressional victory party.
Said was convicted in March for his role in the Feeding our Future scam, with prosecutors stating that the funds — intended to feed children — were used instead to finance a lavish lifestyle. The restaurant co-owner spent some of the money on a $2 million mansion and a $9,000-per-month “shopping habit” at Nordstrom, according to prosecutors.
In August, Guhaad Hashi Said, another Democratic activist and former Omar campaign official, pleaded guilty to running a fictitious food site, Advance Youth Athletic Development. His fabricated claims said the group served 5,000 meals a day to children. Hashi Said pocketed millions from the fraud scheme, the Justice Department said.
Convictions of people in Omar’s orbit deepen scrutiny of whether she had possible links to the scheme, including a $7400 contribution from the now-convicted fraudsters. She says she has returned the money and insists she was completely unaware of the fraud.
*****
Minnesota’s Medicaid Program Was a Magnet for Fraud
Minnesota’s HSS program was launched to help seniors, addicts, the disabled, and the mentally ill secure housing. But the program’s easy entry requirements and exceedingly generous terms made it easy to exploit. Costs quickly spiraled out of control, reports City Journal, as the welfare program was bled by unscrupulous people.
In 2021, the program paid out more than $21 million in claims, the publication said. In the following years, annual costs more than quadrupled. During the first six months of 2025, payouts totaled a staggering $61 million.
In August, as Minnesota’s Department of Human Services uncovered evidence of massive fraud, it shut down the program. Joe Thompson, then the Acting U.S. Attorney for the District of Minnesota, told City Journal that “vast majority” of the HSS program was fraudulent.
In September, Thompson announced criminal indictments for HSS fraud against nine people—six of whom are members of Minnesota’s Somali community. “Most of these cases are not just overbilling,” Thompson said at a press conference. “These are often purely fictitious companies created solely to defraud the system.”
Thompson also announced an indictment in a case involving federally funded autism services for children. The accused, a member of Minnesota’s Somali community, is alleged to have played a role in a $14 million fraud scheme that billed Minnesota’s “Early Intensive Developmental Intervention” for autistic children.
Hassan and her co-conspirators “approached parents in the Somali community” and recruited their children into autism therapy services, the indictment says. It didn’t matter if a child did not have an autism diagnosis; Hassan would offer to arrange a fraudulent one.
In a press release announcing the indictment, the U.S. Attorney’s Office said that “to drive up enrollment, Hassan and her partners paid monthly cash kickback payments to the parents of children who enrolled,” the press release reads. These kickback payments ranged from approximately $300 to $1500 per month, per child.
By the time the fraud scheme was exposed, one in 16 Somali four-year-olds in the state had reportedly been diagnosed with autism—a rate more than triple the state average.
“What we see are schemes stacked upon schemes, draining resources meant for those in need,” Thompson said. “I have spent my career as a fraud prosecutor and the depth of the fraud in Minnesota takes my breath away.”
“Tim Walz and fellow Democrats are being asked to explain how so much money was stolen on their watch,” the NY Times article said. “That provides Republicans, who hope to take back the governor’s office in 2026, with a powerful line of attack.”
