A former Navy intelligence officer tracked terrorist financing starting in 2016 and documented suspicious cash flows from Minnesota welfare programs, including fraudulent daycares, leaving Minneapolis-St. Paul International Airport.
He noted patterns involving fictitious companies claiming child care assistance, with estimates of hundreds of millions in suspicious transfers over a decade, though a $9 billion total remains a projection. Federal sources indicate some funds from Minnesota fraud reached al-Shabaab via hawala networks.
Historical Origins
Fraud concerns in Minnesota’s welfare programs, including the Child Care Assistance Program (CCAP), emerged around 2016 amid reports of inflated claims tied to daycare operations.
A 2019 Minnesota Office of the Legislative Auditor report on CCAP found weak fraud controls but no substantiated evidence of funds reaching terrorists abroad. The Feeding Our Future scheme exploited federal child nutrition programs starting around 2019, defrauding over $250 million.
The Navy Officer’s Investigation
The officer analyzed open-source data on Terminal 2 activities at Minneapolis airport, compiling evidence from banking records, TSA reports, and overseas tracking linking some funds to al-Shabaab and pirate operations.
Despite sharing findings, state officials did not act decisively for years. His 2026 public disclosure aligns with recent federal probes into these issues.
Fraudulent Daycare Schemes
In Minnesota’s CCAP, providers like Abdirizak Gayre and Ibrahim Osman were charged in 2016 for billing $103,500 for absent children, documented in 1,673 incidents via secret cameras.
Fraudsters operated ghost daycares, often linked to Somali networks, billing millions without services. Feeding Our Future led to 56 guilty pleas by 2025 in a $250 million fraud involving fake meals for non-existent children.
Hawala Networks Explained
Hawala systems facilitated informal transfers of fraud proceeds from Minnesota to Somalia without formal banking.
Former JTTF detective Glenn Kerns traced about $20 million yearly from U.S. Somali communities, including Minnesota, to Somalia, where al-Shabaab took cuts regardless of sender intent. Somalia received $1.7 billion in remittances in 2023, exceeding its government budget.
Al-Shabaab Connections
Federal counterterrorism sources confirm millions from Minnesota-area fraud reached al-Shabaab, with one stating, “The largest funder of Al-Shabaab is the Minnesota taxpayer.”
Al-Shabaab, an al-Qaeda affiliate, extorts hawala transfers to fund operations. Past recruitment of “Minnesota men” to ISIS highlighted diaspora risks, with ongoing probes linking fraud to terror groups.
Explosive Program Growth
Housing Stabilization Services (HSS) grew from $2.6 million budgeted in 2020 to $104 million spent by 2024, leading to 77 providers terminated for fraud.
Early Intensive Developmental and Behavioral Intervention (EIDBI) autism claims rose from $3 million in 2018 to $399 million in 2023, with elevated rates in Somali communities. Feeding Our Future payments reached $197 million in 2021; prosecuted fraud exceeds $1 billion.
Political Inertia
State officials faced criticism for slow responses amid political sensitivities in Somali-American communities.
The 2019 auditor report highlighted fraud risks without terror confirmation. Multiple scandals, including Feeding Our Future, involved over 70 DHS providers terminated by 2025.
Strategic Implications
Widespread fraud raises concerns about welfare oversight, remittances funding terror, and needs for reforms like enhanced audits.
Recent Treasury and House Oversight probes in December 2025 address potential terror links. Changes under President Trump, including TPS reviews, may drive accountability.
Verified Fraud Convictions
Federal cases since 2020 secured dozens of convictions for over $1 billion in Medicaid and social services fraud.
In Feeding Our Future, Abdullahe Nur Jesow was the 56th to plead guilty. HSS indictments included eight defendants, many Somali, for fictitious firms.
Documented Financial Flows
Kerns traced $20 million annually via hawalas from U.S. Somalis to Somalia, intersecting Minnesota fraud.
TSA flagged nearly $700 million in declared cash leaving Minneapolis airport over two years. Remittances to Somalia totaled $1.7 billion in 2023, with al-Shabaab taxing portions.
Official Investigations
Treasury initiated probes in December 2025 into Minnesota funds potentially reaching al-Shabaab.
House Oversight expanded inquiries citing possible cover-ups. U.S. Attorney cases continue, including Asha Farhan Hassan charged for $14 million in autism fraud via fake diagnoses and kickbacks.
Program Cost Explosions
EIDBI spending rose from $3 million (2018) to $399 million (2023), with providers increasing from 41 to 328. HSS expenditures hit $104 million yearly.
Child nutrition via Feeding Our Future reached $197 million in 2021; cumulative fraud estimates vary.
Key Indictments and Charges
Moktar Hassan Aden and others indicted in September 2025 for HSS fraud with fictitious companies.
Asha Farhan Hassan faced charges for $14 million autism scheme, paying $300-$1,500 monthly kickbacks per child. 2016 CCAP cases involved Gayre and Osman for ghost attendance; over 70 DHS providers terminated in 2025.
Urgent Reforms Needed
Recent exposés underscore needs for federal-state audits, hawala oversight, and verification technologies.
Ongoing investigations highlight risks to taxpayers and aid integrity. Policy shifts signal potential for stronger accountability.
Sources:
- : “Minnesota Welfare Fraud: Some Funds Went to Al-Shabaab” – City Journal
- : “Feeding Our Future: 78th person charged with fraud during …” – Fox9
- : “Minneapolis daycare charged with overbilling state $103500” – Star Tribune
- : “Defendants charged in first wave of housing stabilization fraud cases” – IRS.gov
- : “FBI searching autism centers in Minneapolis, St. Cloud …” – Star Tribune
- : “The Largest Funder of Al-Shabaab Is the Minnesota …” – Reddit (r/MinnesotaUncensored)