Former Minneapolis Housing Authority board chair pleads guilty to wire fraud in Feeding Our Future case

An Edina man who chaired the board of the Minneapolis Public Housing Authority pleaded guilty Wednesday to federal wire fraud charges for his role in the Feeding Our Future nutrition program fraud scheme.

As part of his plea agreement, Sharmarke Issa, 42, admitted to running entities that laundered federal funding for the scheme, including Wacan Restaurant LLC and a nonprofit called Minnesota’s Somali Community.

Issa was responsible for $7.6 million of the $50 million in fraud scheme money that the federal government says it lost, Assistant U.S. Attorney Matthew Ebert read aloud in court to Issa. The defendant verbally confirmed the timeline and allegations in the plea agreement.

Before the hearing in U.S. District Court in downtown Minneapolis, Issa’s attorney Thomas Brever said his client recognized his conduct was wrong.

“He’s ready to take the consequences for what he did,” Brever said. “After seeing the evidence in the other trial, he recognized there was a real likelihood of conviction.”

Issa resigned from the Public Housing Authority in February 2022, after one of his properties was investigated. Asked how he pleaded by U.S. District Judge Nancy E. Brasel, Issa said, “Guilty, ma’am.”

Under the plea agreement, other charges related to wire fraud and money laundering will be dismissed. While maximum imprisonment for federal wire fraud can be 20 years, Issa likely will receive federal prison time from two years and nine months to three years and five months as part of the plea agreement. That shorter sentence factored in Issa’s ”lowest” level of criminal history and the fact that he accepted responsibility.

The prison time would be followed by a probation period of up to three years, Brasel said during the hearing.

Prosecutors have called the Feeding Our Future case, which so far has 70 defendants charged in Minnesota, one of the largest pandemic-era fraud cases in the United States. The defendants are charged with stealing more than $250 million from federal food programs that reimbursed nonprofits, schools and day cares for feeding low-income children.

Issa was the 19th person in the case to plead guilty. None of the 19 who pleaded guilty have been sentenced yet, but possible sentences range from about two years to nearly five years in prison. Another five defendants were convicted by a jury earlier this year.

Issa claimed to serve 2.3 million meals to children at his food sites. He admitted that some of the fraud scheme money instead went to properties he purchased in Edina, Minneapolis and elsewhere. One example mentioned in the hearing was an Edina house on which Issa spent more than $700,000.

Issa agreed to forfeit the properties he bought with fraud money. He was also ordered to pay more than $3.5 million in restitution, the amount he received of the $7.6 million in federal funding paid out to him and his co-defendants. One co-defendant, Haji Salad, is scheduled to appear Thursday in federal court to change his plea as well.

Issa will not be placed in custody until after his sentencing, provided he does not violate the other terms of his pre-sentence release.