A former Navy intelligence officer’s years-long tracking of suspicious cash flows from Minnesota welfare programs has uncovered patterns linking fraudulent daycares and other schemes to terrorist financing, with millions potentially reaching al-Shabaab through informal hawala networks.[1]
Since 2016, the officer documented fictitious companies claiming child care assistance, with cash leaving Minneapolis-St. Paul International Airport’s Terminal 2. Estimates suggest hundreds of millions in suspicious transfers over a decade, though a $9 billion total is a projection. Federal sources point to some Minnesota fraud funds flowing to the al-Qaeda affiliate in Somalia.
Historical Origins
Fraud concerns in Minnesota’s welfare systems surfaced around 2016, focusing on the Child Care Assistance Program (CCAP). A 2019 state legislative auditor report identified weak controls in CCAP but found no proof of funds reaching overseas terrorists. The issue escalated with the Feeding Our Future scandal, which exploited federal child nutrition programs from around 2019, defrauding over $250 million through fake meals for nonexistent children. By 2025, it yielded 56 guilty pleas.
The Navy Officer’s Investigation
The officer sifted open-source data, including banking records, TSA reports, and overseas tracking, to connect airport activities to al-Shabaab and Somali pirate operations. He shared findings with state officials, but responses lagged for years amid political sensitivities in Somali-American communities. His public disclosure in 2026 coincides with intensified federal scrutiny.
Fraudulent Daycare Schemes
CCAP fraud involved ghost daycares billing for absent children. In 2016, providers Abdirizak Gayre and Ibrahim Osman faced charges for $103,500 in overbilling across 1,673 incidents, captured on hidden cameras. Often tied to Somali networks, these operations racked up millions without delivering services. Feeding Our Future payments peaked at $197 million in 2021, part of prosecuted fraud topping $1 billion. Over 70 Department of Human Services providers were terminated by 2025.
Hawala and Terror Links
Hawala, an informal transfer system bypassing banks, moved fraud proceeds from Minnesota to Somalia. Former Joint Terrorism Task Force detective Glenn Kerns traced about $20 million annually from U.S. Somali communities, including Minnesota, to Somalia, where al-Shabaab extorts cuts from remittances regardless of intent. Somalia received $1.7 billion in such funds in 2023, surpassing its government budget. TSA records show nearly $700 million in declared cash departing Minneapolis airport over two years. Federal counterterrorism sources confirm millions from area fraud reached al-Shabaab.
Program Explosions and Inertia
Other programs ballooned amid fraud. Housing Stabilization Services (HSS) jumped from a $2.6 million 2020 budget to $104 million spent by 2024, prompting 77 provider terminations. Early Intensive Developmental and Behavioral Intervention (EIDBI) for autism claims soared from $3 million in 2018 to $399 million in 2023, with providers rising from 41 to 328 and elevated rates in Somali areas. Key cases include September 2025 indictments of Moktar Hassan Aden and others for HSS fraud via fake firms, and Asha Farhan Hassan’s charges for a $14 million autism scheme with $300-$1,500 monthly kickbacks per child. Federal convictions since 2020 exceed $1 billion in Medicaid and social services fraud, including Feeding Our Future’s 56th guilty plea by Abdullahe Nur Jesow.
Recent federal probes, including Treasury actions in December 2025 and House Oversight inquiries into possible cover-ups, signal momentum. U.S. Attorney cases persist.
Ongoing investigations and policy shifts, such as Temporary Protected Status reviews, underscore stakes for taxpayer funds, welfare integrity, and national security. Enhanced audits, hawala monitoring, and verification tools could curb risks, ensuring aid reaches intended recipients while disrupting terror financing pathways.
Sources:
1: “Minnesota Welfare Fraud: Some Funds Went to Al-Shabaab” – City Journal
2: “Feeding Our Future: 78th person charged with fraud during …” – Fox9
3: “Minneapolis daycare charged with overbilling state $103500” – Star Tribune
4: “Defendants charged in first wave of housing stabilization fraud cases” – IRS.gov
5: “FBI searching autism centers in Minneapolis, St. Cloud …” – Star Tribune
6: “The Largest Funder of Al-Shabaab Is the Minnesota …” – Reddit (r/MinnesotaUncensored)