Somali refugee who ran public housing agency admits to stealing millions in Minneapolis

A Somalian refugee who chaired the board of the Minneapolis Public Housing Authority (MPHA) pled guilty on Wednesday to federal wire fraud charges. Sharmarke Issa, 40, of Edina, facilitated a multi-million dollar money laundering operation that stole money from a COVID fund intended to feed hungry children, court records show.

Issa was responsible for $7.6 million of the $50 million in the Feeding Our Future (FOF) nutrition program fraud scheme, Assistant US Attorney Matthew Ebert told the court. $3.5 million was the portion that Issa took for himself and will have to pay that much in restitution as well as forfeit the properties he bought with fraud money as part of the plea agreement.

The defendant confessed to running entities that laundered federal funding for the scheme. The funds were laundered through a nonprofit called Minnesota's Somali Community and Wacan Restaurant LLC.

Issa verbally confirmed the timeline and issued an admission of guilt as part of the plea agreement, the Minnesota Star Tribune reported. Other charges related to money laundering and wire fraud will be now dismissed. Instead of facing the maximum 20-year federal prison sentence for the charges, Issa will be subjected to serve between two years and nine months to three years and five months after entering a guilty plea.

US District Judge Nancy E. Brasel will factor in his acceptance of responsibility and non-criminal history when handing down his sentence.

Issa was the first migrant appointed by the Minneapolis City Council to chair the MPHA Board of Commissioners. Democrat Mayor Jacob Frey described the fraudster as a "skilled steward" at the time of his appointment.

"Having grown up in Minneapolis public housing after coming to our city as a refugee, Sharmarke's story of success highlights public housing as a vital asset in Minneapolis," Mayor Frey said, according to Front Page. "Sharmarke's life experience and background in urban planning are especially important to MPHA's mission. At a time when the federal government continues to shortchange housing funding, he will be a skilled steward of our public housing infrastructure who understands and centers the needs of residents."

Issa resigned from the board in Feb. 2022 after one of his properties came under investigation. Criminal charges were later announced against 47 defendants in Sept. 2022 in connection to the scheme. Five Somalis charged with wire fraud, federal programs bribery, and money laundering were convicted in June.

The Department of Justice said the scheme was one of the largest fraud cases the agency has had in years.