Minnesota Taxpayer Dollars Allegedly Funded Al-Shabaab Terror Group, Report Claims

A bombshell investigation has revealed that Minnesota taxpayer dollars intended for welfare programs were diverted through elaborate fraud schemes and ultimately ended up funding Al-Shabaab, an al Qaeda-linked terrorist organization operating in Somalia.

Researchers Ryan Thorpe and Christopher F. Rufo of the Manhattan Institute uncovered extensive fraud networks primarily involving Minnesota’s Medicaid Housing Stabilization Services program and the nonprofit Feeding Our Future. Their investigation sought to answer a crucial question about these fraud operations: “Where did the money go?”

The findings are alarming. According to federal counterterrorism sources cited in the report, millions of dollars in stolen funds were funneled back to Somalia through a network of money-transfer operations known as “hawalas.” These transfers became part of the estimated $1.7 billion that the Somali diaspora sent to Somalia in 2023—an amount that exceeded the Somali government’s entire budget for that year.

“The largest funder of Al-Shabaab is the Minnesota taxpayer,” one confidential source told the investigators.

Glenn Kerns, a retired Seattle Police Department detective who spent 14 years on a federal Joint Terrorism Task Force, detailed how the operation worked. According to Kerns, Somalis were operating a complex money network, routing cash on commercial flights from Seattle to Somalia through hawala networks.

“We had sources going into the hawalas to send money. I went down to [Minnesota] and pulled all of their records and, well s***, all these Somalis sending out money are on DHS benefits,” Kerns told the researchers.

The scope of the fraud is staggering. Minnesota’s Housing Stabilization Services program was initially projected to cost $2.6 million, but in its first year alone paid out more than $21 million in claims. By the first six months of 2025, the program was disbursing $61 million. The Minnesota Department of Human Services eventually terminated the program on August 1 after discovering “credible allegations of fraud” involving 77 housing-stabilization providers.

In September, acting U.S. Attorney for the District of Minnesota Joe Thompson announced criminal indictments against eight individuals for HSS fraud, all identified as members of Minnesota’s Somali community. Thompson emphasized that these weren’t simply cases of overbilling—they often involved “purely fictitious companies solely created to defraud the system.”

The Feeding Our Future fraud scheme represents an even larger operation. The nonprofit received just $3.4 million in federal funds in 2019, but as the COVID-19 pandemic hit, it rapidly expanded. By 2021, the organization was receiving almost $200 million. To date, 77 defendants have been charged in connection with this scheme, with the latest announced on November 20.

According to prosecutors, the perpetrators used fake meal counts, doctored attendance records, and fabricated invoices to claim they were serving thousands of meals daily to underprivileged children. Instead, the funds were used to purchase luxury vehicles and real estate in the United States, Turkey, and Kenya.

When officials became suspicious in 2020, Feeding Our Future filed a lawsuit alleging racial discrimination. The report notes that “several individuals” involved in the scheme donated to Rep. Ilhan Omar, D-Minn., and that Omar’s deputy district director advocated for the group.

The fraud networks extend beyond these two programs. In September, Thompson announced an indictment in another scheme involving autism services for children. Asha Farhan Hassan, who was also charged in the Feeding Our Future case, allegedly played a role in a $14 million fraud targeting Minnesota’s Early Intensive Developmental and Behavioral Intervention program. Prosecutors allege that Hassan facilitated fraudulent autism diagnoses for children who did not have the condition, using monthly cash kickbacks ranging from $300-$1,500 per child to drive enrollment.

“To be clear, this is not an isolated scheme,” Thompson said. “From Feeding Our Future to Housing Stabilization Services and now Autism Services, these massive fraud schemes form a web that has stolen billions of dollars in taxpayer money.”

The revelations have sparked political backlash against Minnesota Governor Tim Walz. State Representative Kristin Robbins, who is challenging Walz, shared the report on social media, writing: “Billions of our tax dollars have been stolen under [Tim Walz]. We need help from [federal authorities] to find out if our state dollars are funding terrorism.”

The governor’s office has not yet responded to requests for comment on the investigation.