An investigation by Fox News at the Minneapolis-St. Paul International Airport piqued suspicions of international money-laundering that originates in the Twin Cities region in government-subsidized child care centers. The report revealed that a man was leaving the United States bearing a carry-on bag containing $1 million in cash. Travelers are not prevented from departing with large amounts of cash, as long as any amount over $10,000 is reported to U.S. Customs on an appropriate form.
According to Fox 9 television, more than $100 million in cash left the Twin Cities airport in carry-on luggage in 2017 and went to points in Africa and the Middle East, especially Dubai. The report indicated that money is transferred by the traditional Muslim practice known as “Hawalas.” Hawalas are trusted members of Muslim immigrant communities who transfer non-traced funds to family and associates in foreign countries. According to Investopedia, it is an attractive method of transferring funds among terrorists and money-launderers.
The report indicated that former Seattle police detective Glen Kerns determined that funds were being sent to a Hawala in an area of Somalia that is dominated by the al Shabaab terrorist organization. The Minneapolis-St. Paul area is notable for the size of its Somali immigrant community. The funds, according to Kerns, originates in welfare fraud linked to daycare businesses. Minnesota’s childcare assistance program offers government subsidies to low-income families..
In St. Paul, a hearing is scheduled for Tuesday in Minnesota’s legislature on daycare fraud and the possible transfer of funds to foreign terrorists. At least 10 daycare centers, most of which are owned by Somali immigrants, are being investigated for fraudulent charges to the state. Members of the mostly-Muslim Somali community in the region told Fox 9 that fraud is widespread. Funds are being transferred as remittances to relatives in their homeland. Terrorists demand a percentage upon arrival. Citing sources within the Somali community, detective Kerns -- who also once served on the FBI joint terrorism task force -- confirmed that the practice is taking place.
Governor Mark Dayton (D) said the practice is “disgraceful” and said that he had been aware of it before Fox 9 broke the news. Each of the suspected day care centers have received millions of dollars in taxpayer funds. There are reports that the fraud costs Minnesota $100 million per year or more, or about half of all child care subsidies. Some people buy shares of daycare businesses in order to receive a cut of the subsidies received.
Daycare centers sign up low-income families qualifying for subsidized child care assistance. In a case prosecuted in Minnesota’s Hennepin County, parents could be sign bringing their children to a day care center for registration, only to leave with them shortly thereafter. In some instances, no children at all were brought to the day care centers. In any event, taxpayers were funding the practice.