Two former Minneapolis officials among those charged in fraud case

A former aide to Minneapolis Mayor Jacob Frey and a former board chair of the Minneapolis Public Housing Authority (MPHA) were among the dozens indicted Tuesday in connection with a sweeping scheme to defraud the government of millions meant to feed children.

In court documents, federal prosecutors allege that Abdi Nur Salah, who previously worked in Frey's office, and Sharmarke Issa, who previously chaired the MPHA board, were part of a cohort who claimed to provide meals to needy children but instead used the money for personal purchases, including to buy a piece of real estate together. Both Salah and Issa left their posts in February.

Brian Toder, an attorney for Salah, said they look forward to defending the case, adding that "guilt by association is not a crime" and "those allegations are not going to hold water."

Issa did not immediately respond to a request for comment and did not enter a plea at a brief court appearance.

The pair's indictments came Tuesday in what U.S. Attorney Andrew Luger described as "the first set of charges" in one of the largest federal fraud cases ever brought in Minnesota.

The indictment contends that Salah was part of a group who obtained a nonprofit company called Stigma-Free International "for use in carrying out the scheme." According to public business filings, Stigma-Free International was formed in 2019 by four people, including current City Council Member Jamal Osman.

According to the indictment, Salah and another defendant obtained Stigma-Free International from a person whom officials identified only as "Individual A" and a creator of the company. The indictment says that on Oct. 7 Individual A sent incorporation documents and board minutes to Salah, who announced that Individual A had resigned and another defendant, Ahmed Artan, had taken over as president. The indictment said Artan "replaced Individual A" as the signatory on Stigma-Free International's bank account, and that on Oct. 9, 2020, Artan and another person charged in the scheme prepared applications seeking federal money to provide food to needy children. Artan pleaded not guilty Tuesday.

An aide to Osman said Tuesday that the council member had no comment. Osman previously told the Star Tribune that he "had no association with the non-profit after June of 2020."

Federal officials allege that Salah created a shell company through which some of the money in the fraud scheme flowed, purchased a property with Issa and worked with others to buy a former bar and restaurant in Brooklyn Park.

According to the indictment, Issa created a company called Minnesota's Somali Community and "fraudulently caused [the Minnesota Department of Education] to pay out more than $7.4 million" to programs means to feed children between November 2020 and December 2021. "Rather than provide hundreds of thousands of meals to children it was further part of the scheme that Issa acquired multiple pieces of property, including a $785,000 house for himself," the indictment said.

Salah's employment in the mayor's office ended Feb. 17. He told the Star Tribune he took a leave for personal reasons. Documents obtained through a records request showed Frey's office terminated Salah the day news broke that his name appeared in court records tied to the fraud case, though they cited other reasons for the dismissal.

Issa resigned in February after a property he bought with Salah appeared in court records tied to the probe. Frey appointed Issa to lead the nine-member governing board of the Minneapolis Public Housing Authority and the City Council confirmed it in May 2019, making him the first Somali American in the nation to hold that role.

Frey's office said in a statement Tuesday: "We are grateful to U.S. Attorney Luger for his work on this case. The allegations are appalling."

Staff writers Jeff Meitrodt and Kelly Smith contributed to this report.