In Minnesota, California, and elsewhere, for the past few weeks, it's been looking like one can't turn over a flat rock without uncovering some kind of goblin ripping off American taxpayers by committing welfare fraud or another form of fraud.
On Friday, Treasury Secretary Scott Bessent penned an opinion piece for Fox News, and as it happens, he's got some ideas on how to fix all this.
At the president’s direction, the Treasury Department is examining the transfer of funds allegedly sent from the affected parts of Minnesota to other countries, including Somalia. These funds are often sent through money services businesses, which provide financial services outside the banking system. This money could have potentially been diverted to terrorist organizations, such as Al-Shabaab. Treasury has a long history of following the money to financially suffocate bad actors, like the mafia and Mexican drug cartels. Now we are doing the same to shut down Somali fraud rings.
As part of this effort, Treasury’s Financial Crimes Enforcement Network (FinCEN) and the IRS are investigating financial institutions that may have played a role in abetting rampant fraud. Specifically, we are evaluating whether these institutions have complied with their legal obligations under the Bank Secrecy Act and Treasury’s regulations, which are designed to detect money laundering and safeguard the U.S. financial system from abuse.
That's all to the good. But it's not all good news; Secretary Bessent also gives us a little better idea of exactly how much this is costing us, the American taxpayers.
Sadly, Minnesota does not have a monopoly on this sort of fraud. Similar misconduct is almost certainly happening in many other states, especially states like California, New York, and Illinois, which impose lax controls on the use of government benefit funds. In fact, our own Government Accountability Office estimates that the government may lose more than $500 billion each year to fraud. This is a staggering figure larger than the GDP of most countries. It represents up to 10% of federal tax revenues each year and approximately 1% to 2% of GDP.
10 percent. Every year. Now, even if we recover every cent of this money, it won't be a patch on the national debt, which is closing in on $39 trillion. But that's no reason to let it continue.
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Here's another thing that the Trump administration can do, although this one's outside of Secretary Bessent's wheelhouse: Any fraudster who is not a citizen, deport them. Any fraudster who is a naturalized citizen revoke their citizenship and deport them. Any fraudster who is a natural-born citizen, indict them and (hopefully) convict them, and when that's done, seize any assets they may have to repay at least some of what they stole.
This isn't a new thing. In my years working in the medical device and biotech industries, I remember many tales from colleagues about Medicare and Medicaid fraud in particular. A former business partner of mine had to repay almost a million dollars in Medicare fraud that one of his salespeople had pulled before disappearing; the guy was my old partner's employee, so he was liable, or at least, that's what the authorities told him. But in recent years, it seems the whole fraud issue has run wild, and yes, Somali immigrants seem to be involved in a wildly disproportionate number of the really big schemes.
What Treasury is planning will be great. But if Immigration & Customs Enforcement isn't already involved, they need to be.
Editor’s Note: Help us continue to report the truth about corrupt politicians like Minnesota Governor Tim Walz.
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