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Minnesota fraud probe fuels IRS crackdown calls on nonprofit accused of Hamas links

Minnesota fraud probe fuels IRS crackdown calls on nonprofit accused of Hamas links

FIRST ON FOX: The California chapter of the Council on American-Islamic Relations (CAIR) is facing heightened scrutiny as House Ways and Means Committee Chairman Jason Smith referred the group to the IRS for a probe into whether the nonprofit should lose its tax-exempt status, citing alleged misuse of taxpayer funds, potential violations of federal law and support for unlawful activity. “Tax-exempt status is a privilege, not a right,” Smith, a Republican from Missouri, told Fox News Digital Tuesday. “Organizations that receive special treatment under the tax code must follow the law and operate in the public interest, not bankroll illegal activity, mislead federal agencies, or misuse hard-earned taxpayer dollars.”  Smith sent a letter to Treasury Secretary and acting IRS chief Scott Bessent and IRS CEO Frank Bisignano Tuesday referring CAIR-California for IRS review, arguing that the nonprofit may no longer meet the legal standards required to operate as a 501(c)(3) organization. The letter claims that evidence alleges CAIR-California improperly used millions of dollars in federal funds, provided misleading information to the IRS, and materially supported activity that resulted in arrests and violations of the law, particularly during campus protests across California. BESSENT BLAMES WALZ AS TREASURY PROBES WHETHER MINNESOTA FRAUD FUNDS REACHED TERROR GROUP AL-SHABAB The Council on American-Islamic Relations is a leading American Muslim civil rights organization, with chapters across the country and its home base located in Washington, D.C. Republicans have scrutinized CAIR in recent years, including calls for Treasury reviews over alleged Hamas ties — allegations the group denies. CAIR pushed back on the letter to Fox News Digital Tuesday, calling it “embarrassing” and based on “a false claim made by a pro-Israel group without fact-checking.”  The New York Post published an article published in March 2025 based on an advocacy group, Intelligent Advocacy Network, investigation into CAIR-California that found alleged financial irregularities.  CAIR-California includes offices in Los Angeles, the San Francisco Bay Area, Sacramento and San Diego.  The call for an investigation comes as the IRS and other investigators dig into what officials say is a sprawling COVID-era scheme in Minnesota involving money laundering that has dominated headlines since before the holiday season. Federal prosecutors have estimated the fraud could exceed $1 billion and rise to as high as $9 billion.  Officials have made dozens of arrests, the majority of which are from the state’s Somali community.  “The widespread fraud uncovered in Minnesota has only made our efforts to root out fraud in the nonprofit sector more urgent, and we owe it to the American taxpayer to hold these bad actors accountable,” Smith told Fox Digital. “If these allegations are true, CAIR-California does not meet the standards required to maintain tax-exempt status, and the IRS must act accordingly.” FEDERAL PROSECUTOR CALLS NEWSOM ‘KING OF FRAUD’ AS TRUMP LAUNCHES CALIFORNIA CORRUPTION PROBE The chairman’s letter detailed concerns surrounding CAIR-CA’s handling of more than $7 million in federal refugee legal-aid funding intended to help resettle Afghan refugees.  The referral, citing the New York Post article detailing a watchdog group’s previous investigation, indicated CAIR-CA assisted fewer than 10% of the refugees it pledged to help, while allegedly routing millions of dollars through an unregistered affiliate operating under CAIR-CA’s tax identification number — potentially exposing the group to False Claims Act violations, according to the referral.  “Not only does this misdirection of funds back to itself potentially violate the law, but the failure of CAIR-CA to properly document the use of grant funding would also place the organization at risk of violating the False Claims Act for misrepresenting grant use,” Smith wrote.  CAIR told Fox News Digital that Smith’s letter was “provably inaccurate letter,” and based on “retracted story about CAIR-California that The New York Post had to correct after it repeated a false claim made by a pro-Israel group” is “a sign of how desperate he and other Israel First members of Congress have become to smear and silence Americans who speak up for Palestinian human rights and against the waste of American taxpayer dollars on Israel’s genocide in Gaza.” CAIR shot continued that, “Contrary to the false claims made by Mr. Smith, CAIR-California is a respected civil rights organization with a long record of lawful advocacy and cooperation with government agencies.” “Every dollar CAIR-California receives is used strictly for its intended purpose and subject to rigorous internal and external oversight, auditing, and reporting. Funds designated to support Afghan refugees are used exclusively to serve that population, consistent with grant terms. CAIR-California also receives a diverse set of funds that allows the organization to serve clients beyond the Afghan and Muslim community,” CAIR continued in an emailed comment.  If the IRS revokes a group’s 501(c)(3) status, it can trigger a cascading hit on the organization — donations may no longer be tax-deductible, federal taxes and penalties can apply, and the nonprofit’s funding pipeline can dry up as donors and grantmakers pull back. The letter adds that evidence suggests CAIR-California “institutionally endorsed and materially supported” college encampments during the anti-Israel protests that swept the nation from 2021 until the Trump administration, including protests that “resulted in violations of the law and/or arrests.”  The letter argued that CAIR national also promoted and endorsed a “Protest Donald Trump” rally at the Minnesota Republican Party Lincoln-Reagan Dinner during the 2024 election cycle, which the letter claims may have violated the prohibition on 501(c)(3)s to directly or indirectly participate, or intervene in, any political campaign.   TRUMP DEMANDS CALIFORNIA HAND OVER RECIPIENT LISTS AS $10B PAUSED AMID FRAUD CONCERNS Smith argued that while protests are generally permitted, the IRS has previously found groups can lose exempt status if demonstrations cross into civil disobedience or other illegal activity. “The only allegation in Mr. Smith’s letter that is even remotely close to accurate is the claim that CAIR expressed support for college students who hosted sit-ins to peacefully protest their university’s financial entanglements with the Israeli government’s genocide in Gaza,” CAIR said. “We were proud to express solidarity with students peacefully protesting the Gaza genocide, who were on the

Trump criminal probe of Fed Chair Powell marks unprecedented escalation — and a warning to his successor

Trump criminal probe of Fed Chair Powell marks unprecedented escalation — and a warning to his successor

President Donald Trump’s criminal probe targeting Federal Reserve Chair Jerome Powell marks an extraordinary escalation in his battle with the central bank, sending a clear warning to the next Fed chair about the risks of defying the White House. Powell confirmed the Department of Justice investigation on Sunday evening in a video statement, calling the move “unprecedented” and another example of what he described as the Trump administration’s ongoing efforts to intimidate the central bank. Powell’s decision to respond so publicly, after days of private consultation with advisers, marked a sharp departure from the central banker’s typically measured approach.  TRUMP VS THE FEDERAL RESERVE: HOW THE CLASH REACHED UNCHARTED TERRITORY The probe focuses on whether Powell was truthful during congressional testimony about the project to overhaul the Fed’s two main buildings on the National Mall. No charges have been filed, and Powell has denied any wrongdoing. Powell, widely viewed as one of the most crisis-tested Federal Reserve chairs in modern U.S. history, built his career as a lawyer and investment banker in New York before entering public service in the administration of President George H.W. Bush. He joined the Federal Reserve’s Board of Governors in 2012 and was tapped to lead the central bank in 2017. Now, a criminal investigation may represent the biggest test of Powell’s leadership, unfolding as Trump weighs his choice for the next Fed chair with Powell’s term set to expire in May. The next Fed chair would take on one of the most powerful economic jobs in the country, helping decide how expensive it is to borrow money for things like homes, cars and credit cards. Those decisions directly affect the cost of everyday living for Americans. FROM MORTGAGES TO CAR LOANS: HOW AFFORDABILITY RISES AND FALLS WITH THE FED Trump has narrowed his shortlist to four candidates as he approaches a final decision on leadership at the Fed: Kevin Hassett, Kevin Warsh, Christopher Waller and Rick Rieder. Kevin Hassett is Trump’s top economic advisor and a loyal defender of the administration’s policies. He currently serves as director of the White House’s National Economic Council, and held two senior roles during Trump’s first term and advised the president on economic policy during the 2024 campaign. POWELL REVEALS WHAT IT WOULD TAKE TO STEP DOWN FROM THE FED AS PRESSURE MOUNTS Meanwhile, Kevin Warsh, a former Morgan Stanley banker, has emerged as a vocal critic of current Fed leadership, sharpening his attacks as he positioned himself as a potential replacement for Powell. He became the youngest person to serve on the Federal Reserve Board of Governors in 2006. Federal Reserve Gov. Christopher Waller has repeatedly called for rate cuts, a move that aligns, in part, with Trump’s demands. Of the candidates, he is considered the veteran academic of the group. He has also reiterated the importance of maintaining an independent Federal Reserve. And BlackRock Global Fixed Income Chief Investment Officer Rick Rieder is the last candidate to have an interview with Trump before the president makes his decision. Treasury Secretary Scott Bessent, who did pre-interviews with all the candidates, said Trump is expected to announce his decision by the end of January. Meanwhile, some lawmakers on Capitol Hill said they would block the confirmation of Trump’s Federal Reserve nominee until the legal matter is resolved. The White House referred questions to the Department of Justice. The Department of Justice did not immediately respond to Fox News Digital’s request for comment. As the investigation unfolds and a decision on the next Fed chair approaches, the episode underscores the growing political pressure surrounding a role long viewed as insulated from the White House.

‘Cringe’ Soros-backed Philly DA torched for dropping ‘FAFO’ in warning to ICE

‘Cringe’ Soros-backed Philly DA torched for dropping ‘FAFO’ in warning to ICE

Police groups, MAGA supporters and the Department of Homeland Security mocked left-wing Philadelphia District Attorney Larry Krasner on social media for his warning to the National Guard and U.S. Immigration and Customs Enforcement amid President Donald Trump’s immigration and fraud crackdowns.  “To ICE and the National Guard: if you commit crimes in Philadelphia, we will charge you and hold you accountable to the fullest extent of the law,” Krasner posted to X Saturday, accompanied by a black and white photo of himself wearing sunglasses and the caption “FAFO.” “FAFO” is internet slang meaning “f— around and find out.” It increasingly has entered the MAGA political lexicon, been embraced by Trump, and been used in administration-linked messaging and by prominent Republican allies as a blunt warning to political opponents and foreign adversaries.  Krasner has served as Philadelphia’s district attorney since 2018, frequently coming under fire from conservatives for reduced reliance on cash bail, shifts in charging for some low-level crimes, and an aggressive posture on police accountability. Republicans have repeatedly pointed to his office’s bail and prosecution policies as drivers of public-safety concerns, staging high-profile hearings and pushing an impeachment effort that ultimately collapsed in court. ICE CHIEF TODD LYONS FIRES BACK AFTER AOC ALLEGES RENEE NICOLE GOOD WAS ‘ASSASSINATED IN THE STREET’ Conservatives, police groups and leaders and administration social media accounts lambasted Krasner over the message. Krasner’s post came amid a heightened federal law enforcement presence in Minnesota, as a sweeping Minneapolis fraud investigation unfolded and a woman was fatally shot during the increased deployment. “This embarrassment of a DA regularly gives the velvet glove treatment to murders, robbers, and rapists…what a joke,” Fraternal Order of Police National Vice President Joe Gamaldi posted to X, slamming Krasner.  “Unlike criminals in Philadelphia who get their charges dropped by the DA,” the National Police Association responded.  The Department of Homeland Security responded with at least two memes brushing off Krasner’s comment, including a gif of a person dressed up as a founding father with the caption, “Oh no! Anyways.”  “True Clownsmanship,” a lawyer on X quipped. “Note that Larry Krasner has never said FAFO to the actual criminals he’s supposed to put behind bars, and thus his city is garbage. But good posturing you pathetic waste of space,” Republican communicator Matt Whitlock wrote.  “This is so cringe, even for a Soros DA,” another commented.  Left-wing billionaire George Soros was one of Krasner’s donors amid his election effort, Fox Digital previously reported.  “It would be news if Krassner prosecuted an actual criminal, let alone ICE,” RealClearInvestigations senior writer Mark Hemingway posted.  “LMAO, they try so hard to use social media the way this administration does, and it fails every time,” another posted, referring to Democrats attempting to lean into MAGA’s often searing use of social media.  “This idiot has never read the Supremacy Clause of the US Constitution,” former New Jersey Senate candidate Mike Crispi posted. “Federal law trumps local law when in direct conflict of one another. This post is pure provocative trash.”  Krasner’s social media message joins a chorus of Democrats nationwide criticizing ICE and federal immigration law enforcement officials following the fatal shooting of Renee Good in Minnesota earlier in January. Good was shot on a residential street while operating her car.  DHS said Good used her car as weapon against the agents before the shooting, calling her actions an “act of domestic terrorism.” Philadelphia Sheriff Rochelle Bilal also slammed ICE earlier in January as made up, “fake, wannabe law enforcement,” claiming ICE violated both “legal law” and “moral law” following the shooting.  Democrats have rallied against the federal law enforcement officer’s actions, with some left-wing lawmakers such as New York Rep. Alexandria Ocasio-Cortez calling the incident “murder,” while other Democrats have underscored a push for more accountability of federal officers.  Democratic Minnesota Gov. Tim Walz authorized the National Guard to be “staged and ready to support local and state law enforcement in protecting critical infrastructure and maintaining public safety following a shooting involving federal immigration enforcement agents in south Minneapolis.” Trump has mobilized, or attempted to mobilize, the National Guard to other cities in 2025 as part of his mission to crack down on crime, including when he federalized the Washington, D.C., police force in August 2025.  CLICK HERE TO GET THE FOX NEWS APP Krasner’s office did not immediately respond to Fox Digital’s request for comment on criticisms revolving around his Saturday message.