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UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Criminal No. 22-124(2) (NEB/DTS)
UNITED STATES OF AMERICA, )
)
Plaintiff, )
) GOVERNMENT’S POSITION
v. ) REGARDING SENTENCING
)
MOHAMED JAMA ISMAIL, )
)
Defendant. )
The United States of America, by and through its attorneys, Andrew M. Luger,
United States Attorney for the District of Minnesota, and Joseph H. Thompson, Harry
M. Jacobs, Matthew S. Ebert, and Daniel W. Bobier, Assistant United States
Attorneys, submits the following sentencing memorandum and respectfully requests
that the Court impose a sentence of 151 months in prison.
I. BACKGROUND
A. Ismail’s Fraud Scheme
Defendant Mohamed Ismail was convicted of participating in a massive
fraudulent scheme to obtain federal child nutrition program funds intended to
provide free meals to children in need. The defendant and his co-conspirators
obtained, misappropriated, and laundered more than $40 million in program funds
that were intended as reimbursements for the cost of serving meals to children. They
did so by exploiting changes in the program intended to ensure underserved children
received adequate nutrition during the Covid-19 pandemic. Ismail and his co-
conspirators took advantage of the Covid-19 pandemic—and the resulting program
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changes—to enrich themselves by fraudulently misappropriating millions of dollars
in federal child nutrition program funds.
Ismail was a partner and co-owner of Empire Cuisine & Market, one of the
entities that originated the fraud scheme. As the Court will recall, it was Empire
Cuisine that enrolled in the federal child nutrition program in April 2020—during
the early days of the Covid-19 pandemic and within weeks of their registration of the
company with the Minnesota Secretary of State. Ismail and Farah immediately
opened a number of federal child nutrition program sites and began claiming—
falsely—to be serving meals to thousands of children per day. These claims were
fraudulent. As the Court heard at trial, no meals at all were served at many of the
Empire Cuisine “sites.” Indeed, at some of the sites, it was instead the Shakopee
Public Schools who were actually serving meals to kids on a daily basis.
Ismail’s company was one of the for-profit restaurants that Minnesota
Department of Education employees flagged as submitting an alarming number of
fraudulent claims in the summer and fall of 2020. This led MDE to change the rules
to prohibit for-profit restaurants from operating federal child nutrition program sites.
But Ismail and his co-owner Abdiaziz Farah were not deterred. Rather than stop
submitting fraudulent meal claims, they began opening their sites in the name of
various non-profit entities, and then passing the fraudulently obtained federal child
nutrition program funds through to Empire Cuisine.
Ismail was a full partner in Empire Cuisine and in the fraud scheme. During
a search of his home in January 2022, agents found an array of documents related to
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all aspects of the fraud scheme, including fake meal count sheets. See, e.g., Gov’t Ex.
H-70q.
Agents recovered notes regarding the fake counts submitted for meals purportedly
distributed at various sites around Minnesota. See, e.g., Gov’t Ex. H-70t.
Agents also recovered fake invoices, including an invoice claiming that Empire
Cuisine was entitled to more than $1.5 million in federal child nutrition program
funds for meals purportedly distributed in the month of March 2021. See, e.g., Gov’t
Ex. H-70, H-70v.
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B. Ismail’s Fraud Proceeds
Ismail personally took home more than $2 million from the fraud scheme in a
12-month period. He spent his money freely.
Over a 14-month period from November 30, 2020 through January 20, 2022,
Ismail withdrew $170,000 in cash from ATMs. He purchased more than $11,000
worth of firearms and firearms accessories, including a Daniel Defense DDM4 V7 AR-
15 style rifle, a Black Rain AR-15-style rifle, a Heckler & Koch VP9-B 9mm handgun,
and multiple optical sights and scopes.
In May 2021, he used more than $130,000 in fraud proceeds to pay off his home
mortgage.
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Ismail sent much of this money abroad, where it remains to this today. He sent
more than $400,000 in fraud proceeds to China.
Date Recipient Amount
March 4, 2021 Jiangxi Enda Linen Co., Ltd. $199,785
(China)
June 3, 2021 Amaana Money Transfer Co. $52,000
(Int’l Wire Transfer)
June 29, 2021 Jiangxi Enda Linen Co., Ltd. $100,000
(China)
July 2, 2021 Continental Logistics Co., Ltd. $13,900
(China)
August 12, 2021 Guangzhou Logistics Co., Ltd. $18,923
(China)
October 7, 2021 Shangro City Xiange Enter M $100,000
Ser C (China)
Total $484,608
These were federal child nutrition program funds received by Empire Cuisine
& Market. On February 22, 2021, for example, Ismail deposited a $200,000 check
from Empire into his personal bank account. At the time, he only had $6,000 in his
account. Two weeks later, he wired almost all of this money, $199,785, to a Chinese
entity called Jiangxi Enda Linen Co., Ltd.
Notably, despite being the proceeds of his fraud scheme, the money Ismail sent
to China has not been seized or forfeited because it is located abroad and outside the
reach of American law enforcement. In other words, Ismail will leave prison a wealthy
man.
Ismail also owns real estate in both Kenya and Somalia. He owns real estate
in the South B neighborhood in Nairobi, Kenya. PSR ¶154. The property is worth
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approximately $200,000. Id. Ismail also owns a second apartment that is currently
under construction in Nairobi. Id. That property is worth approximately $170,000. Id.
Ismail also owns a home in Borama, Somalia, a city of 300,000 near the
Ethiopian border. PSR ¶154.
Like the funds he sent to China, these properties are not subject to seizure
because they are located outside of the United States.
He will leave prison a wealthy man.
C. Ismail’s Passport Fraud and Attempted Flight to Kenya
On January 20, 2022, the government executed search warrants at two dozen
locations around Minnesota in the investigation in the scheme to defraud the federal
child nutrition program. The search locations included the residences of both
Mohamed Ismail and his business partner and future co-defendant Abdiaziz Farah.
During the searches, the government seized their passports. A couple of months later,
on March 22, 2022, both Ismail and Farah went to the Minnesota Passport Office to
apply for new passports. Both Ismail and Farah lied on their passport applications,
falsely claiming they had lost their old passports.
On January 20, 2022, federal agents seized Ismail’s U.S. passport during the
execution of a federal search warrant at his house. The passport was found in a locked
safe along with a passport belonging to Ismail’s wife. Ismail provided agents the
combination to unlock the safe.
In the wake of the search, Ismail and Farah retained attorneys and were
informed they were targets of the Feeding Our Future investigation.
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Two months later, on March 22, 2022, Ismail and Farah went to the
Minneapolis Passport Agency in downtown Minneapolis to apply for new U.S.
passports. Each of them lied on their passport applications.
Ismail and Farah each claimed falsely that their passports had been lost. They
signed their applications after attesting that they had “not knowingly and willfully
made false statements or included false documents in support of this application.”
Ismail also submitted a required Statement Regarding a Lost or Stolen U.S.
Passport Book and/or Card (also known as a Form DS-64). On the Form DS-64, Ismail
falsely represented that he had “lost” his passport “at home.” He also falsely claimed
that he had filed a police report in connection with his “lost” passport. A search of
police records showed that this was not true.
The Form DS-64 expressly warned that “false statements made knowingly and
willfully on this form, in U.S. passport applications, or in affidavits or other
supporting documents submitted therewith are punishable by fine or imprisonment
under U.S. law, including 18 U.S.C. 1001 and/or 18 U.S.C. 1542.”
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Based on these false representations, the U.S. Department of State issued
Ismail and Farah new U.S. passports the same day they applied.
Perhaps unsurprisingly, less than two weeks after fraudulently obtaining a
new passport, Ismail attempted to use it to leave the country and go to Kenya. On
April 4, 2022, Ismail booked a flight departing from Rochester, Minnesota on April
20, 2022, with the ultimate destination of Nairobi, Kenya. Ismail used his new
passport to check in for his flight at the Rochester International Airport on April 20.
Ismail arrived at MSP airport that afternoon and presented his ticket to board his
flight bound for Nairobi. FBI agents arrested him on the jetway.
At the time of his arrest, Ismail was carrying two carry-on bags. He had five
full-sized suitcases of checked luggage.
In short, there is every indication that Ismail intended to flee beyond the reach
of law enforcement to live out his days on the millions he stole from the American
taxpayers.
II. THE GUIDELINES RANGE
A. The Base Offense Level and Loss Amount
The base offense level is 6 pursuant to Guidelines § 2B1.1(a)(1). PSR ¶102. The
base offense level is increased 22 levels pursuant to Guidelines § 2B1.1(1)(L) because
the loss was more than $25 million but less than $65 million. PSR ¶103. The offense
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level is increased 2 levels pursuant to Guidelines § 2B1.1(b)(12) because the offense
involved conduct described in 18 U.S.C. § 1040 (Fraud in Connection with a Major
Disaster or Emergency Benefits). PSR ¶104. The offense level is increased by 2 levels
pursuant to Guidelines § 2S1.1(b)(2)(B) because the defendant was convicted under
18 U.S.C. § 1956. PSR ¶110. Another 2-level enhancement applies pursuant to
Guidelines § 3C1.1 because the defendant obstructed justice by committing passport
fraud and attempting to flee the country and escape prosecution in April 2022. PSR
¶113.
Although the defendant was previously convicted of passport fraud in
December 2022, he qualifies as a zero-point offender because his prior conviction is
considered relevant conduct to the instant offense. PSR ¶¶116, 122. As such, he
receives a 2-level reduction pursuant to Guidelines 4C1.1(a) and (b). PSR ¶116.
Based on the above, the total offense level is 32. PSR ¶118.
B. Criminal History
Ismail was convicted of passport fraud in November 2022 and sentenced to 7
months in prison. PSR ¶122. Because that crime qualifies as relevant conduct and
led to the application of an obstruction enhancement in this case, Ismail does not
receive any criminal history points for that conviction.1 Accordingly, he falls into
criminal history category I. PSR ¶125.
1 Ismail has objected to the application of the obstruction enhancement on the grounds
that his passport fraud case had nothing to do with his fraud case. As the PSR pointed out,
if that were the case, Ismail would fall in criminal history level II and would not qualify for
the zero-point offender reduction under Guidelines § 4C1.1. PSR Addendum at 3-4.
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C. Advisory Guidelines Range
An offense level of 32 and criminal history level I results in an advisory
Guidelines range of 121 to 151 months in prison.
III. GOVERNMENT’S SENTENCING RECOMMENDATION
Based on a review of the § 3553(a) factors, the government recommends that
the Court impose a sentence of 151 months in prison.
A. Nature and Circumstances of the Offense
Ismail participated in one of the largest fraud schemes in the history of the
District of Minnesota, and the single largest Covid-19 fraud scheme in the country.
He took advantage of a once-in-a-century global pandemic to enrich himself. He
abused the generosity of Minnesota’s social safety net—a system designed to ensure
that no child goes without food.
Notably, Ismail’s company was one of the first to get involved in the massive
scheme to fraudulently obtain federal child nutrition program funds. His was one of
the companies that forced MDE to change the rules to prohibit for-profit restaurants
for operating federal child nutrition program sites. But, of course, he and his co-
conspirators were not deterred. They simply carried on by opening sites through a
variety of non-profits and then passing the fraudulently obtain funds to their
company, Empire Cuisine.
As noted above, Ismail profited handsomely from his role in the scheme—
taking home more than $2 million in federal child nutrition program funds in 2021
alone. Ismail sent much of this money abroad—he transferred nearly $500,000 to
China and owns real estate in both Kenya and Somalia. To be clear, this money is
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beyond the reach of American law enforcement. Neither these funds nor his
international real estate holdings have been, or will be, seized or forfeited. Ismail will
leave prison a rich man.
Despite the egregious of his fraud scheme, Ismail has never taken any
responsibility or expressed any remorse for his crime. Like his co-defendants, he has
no contrition for defrauding the very country that took him in.
B. History and Characteristics of the Defendant
Ismail was born in Somalia. PSR ¶130. His family fled to Kenya in 1991, where
he spent time in a refugee camp. PSR ¶130. He later attended boarding school in
Kenya. PSR ¶130.
Ismail immigrated to the United States in 1999. PSR ¶131. He became a
naturalized U.S. citizen in 2005. PSR ¶238. Ismail sponsored his mother and father’s
immigration to the United States. PSR ¶135.
Ismail found employment in Minnesota, and later started a small business in
Shakopee. PSR ¶150. By all measures, Mohamed Ismail was living the American
dream. But it wasn’t enough. In 2018, Ismail sent his wife and five children to live in
Kenya in 2018. PSR ¶131. And then he began egregiously defrauding the state and
country that took him in and afforded him so many opportunities.
C. The Need for Deterrence
Ismail participated is one of the largest fraud schemes in the history of the
District of Minnesota, and the single largest Covid-19 fraud scheme in the country.
But Ismail didn’t just take advantage of the Covid-19 pandemic to enrich himself and
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his co-conspirators. He took advantage of our state’s compassion, and its efforts to
ensure no child went hungry.
Make no mistake, Ismail’s fraud has done great damage to the state. It has
eroded trust in the government and raised questions about the sustainability of the
state’s system of social services. His crime undermined and endangered legitimate
nonprofit organizations that rely on donations to carry out necessary and important
charitable work.
Despite this, to this day, Ismail has denied any and all responsibility for his
crime. He has not expressed an ounce of remorse for his actions. He appears to have
felt no shame.
Importantly in this particular case, the Court must send the message that
fraud schemes like this are not worth it. That is particularly true here where Ismail
still has a significant amount of fraud proceeds. Make no mistake. Ismail will leave
prison a wealthy man, with real estate holdings in both Kenya and Somalia. And for
that reason alone, the Court needs to impose a significant sentence. The Court must
levy a sentence sufficiently severe that few would deem it worth it, even where $2
million in ill-gotten gains await them upon completion of their sentence.
Taking into consideration the Sentencing Guidelines, as well as all of the other
factors required to be considered under § 3553(a), the government respectfully
suggests that a sentence of 151 months in prison appropriately reflects the
seriousness of Shariff’s crimes, promotes respect for the law, provides a just
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punishment, and creates adequate deterrence not only to Ismail, but to all other
individuals who take advantage of the state and believe that they are above the law.
IV. CONCLUSION
For the reasons stated above, the government respectfully requests that the
Court impose a sentence of 151 months in prison.
Respectfully Submitted,
Dated: October 2, 2024 ANDREW M. LUGER
United States Attorney
/s/ Joseph H. Thompson
BY: JOSEPH H. THOMPSON
HARRY M. JACOBS
MATTHEW S. EBERT
DANIEL W. BOBIER
Assistant U.S. Attorneys
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