US Moves to Seize Luxury Kenya Properties in Sh39 Billion Covid Fraud Scandal

American authorities are intensifying efforts to confiscate luxury properties scattered across Kenya that were purchased using money stolen from a massive Sh39 billion Covid-19 relief fraud scheme orchestrated primarily by Somali immigrants in Minnesota.

The audacious scam, which exploited a federal programme meant to feed vulnerable children during the pandemic, has emerged as one of the largest frauds in American history, with Kenya featuring prominently as a destination for laundering the stolen funds.

Multi-million shilling apartments in Nairobi’s upmarket estates and a sprawling beach resort at the Coast are among the prime properties now in the crosshairs of US federal agents, though officials have admitted that seizing assets on foreign soil presents significant legal hurdles.

The scale of the theft is staggering. Between 2020 and 2022, more than 77 individuals, most of them Somali refugees who had been resettled in Minnesota, systematically defrauded American taxpayers of over $300 million through a non-profit organisation called Feeding Our Future.

Court documents reveal that the conspirators submitted false claims for reimbursements, supposedly for feeding thousands of children daily at various sites across Minnesota. In reality, many of these sites were nothing more than empty parking lots and vacant commercial spaces where no meals were ever served.

The fraud was breathtakingly simple yet devastatingly effective. The perpetrators created shell companies, forged attendance rosters with made-up names of children, inflated meal counts, and submitted fabricated invoices to the Minnesota Department of Education, which administered the Federal Child Nutrition Programme.

As Covid-19 restrictions forced the US Department of Agriculture to relax oversight rules to ensure children continued receiving meals during lockdowns, the fraudsters seized the opportunity. Feeding Our Future’s disbursements exploded from a modest Sh438 million in 2019 to an eye-watering Sh25.8 billion in 2021.

Among those convicted is Liban Yasin Alishire, a former Brooklyn Park resident who has agreed to forfeit an apartment unit in Nairobi and the Sh27.9 million Karibu Palms Resort on Diani Beach. Court papers show Alishire wired Sh27.9 million from his fraudulent proceeds directly to purchase the Indian Ocean beachfront property in November 2021.

The resort, with its pristine white sand beaches and luxury amenities, stands as a monument to the brazenness of the scheme. Alishire received over Sh128.9 million through his fraudulent claims before pleading guilty in January 2023.

The ringleader, 26-year-old Abdiaziz Shafii Farah, who arrived in America as a refugee, has been sentenced to 28 years in prison and ordered to pay Sh6 billion in restitution. Farah purchased extensive real estate in Kenya, including a high-rise apartment building in Nairobi, using money he laundered through China.

In a damning statement, the US Department of Justice conceded that Farah’s international real estate holdings are beyond the reach of American law enforcement and cannot be seized or forfeited, exposing the limitations of US power when assets are held overseas.

Federal Judge Nancy Brasel expressed disgust at Farah’s betrayal during sentencing. “It is ironic at best that as the government aimed that no child went hungry during the pandemic, you saw the opportunity to fraudulently make money,” she declared from the bench.

Acting US Attorney Joseph Thompson was even more scathing, noting that Farah had thanked Americans who gave him refuge, citizenship and free college education by “robbing us blind.”

Another convicted fraudster, 24-year-old Abdimajid Mohamed Nur, used his share of the stolen money to fund an extravagant lifestyle that included a Sh8.2 million Dodge Ram pickup, Sh4.5 million Hyundai Santa Fe, Sh3.9 million worth of jewellery from Dubai, and a honeymoon in the Maldives. He also funnelled money to Kenya through a network of shell companies.

The fraud was so extensive that Feeding Our Future opened more than 250 sites throughout Minnesota and fraudulently obtained over Sh31 billion in federal funds. The conspirators used sophisticated money laundering techniques, routing funds through multiple countries including China, Turkey and Kenya to conceal the origins of their ill-gotten wealth.

When The Star reached out to the US Department of Justice for comment on the progress of seizing Kenyan properties, the department had not responded by the time of publication.

The revelation that Kenya served as a safe haven for laundering proceeds from one of America’s biggest pandemic frauds raises uncomfortable questions about the country’s financial oversight systems and its vulnerability to international money laundering schemes.

Legal experts say the case exposes gaps in international asset recovery frameworks. While the US has successfully convicted the fraudsters and can seize their domestic assets, properties purchased in countries like Kenya remain largely untouchable without extensive bilateral cooperation and legal proceedings in Kenyan courts.

The scandal has also reignited debate in Minnesota about the vetting and oversight of refugee resettlement programmes. Many of the convicted fraudsters had been welcomed to America as refugees fleeing conflict in Somalia, only to exploit the generosity of their adopted homeland.

As more suspects face trial, investigators continue uncovering the extent to which Kenyan properties feature in the money laundering network. The full value of real estate purchased in Kenya using the stolen funds remains unclear, though court documents suggest it runs into hundreds of millions of shillings.

For now, luxury apartments in Nairobi and beach resorts on the Coast stand as glittering symbols of one of the most audacious frauds in American history, their ownership contested but their seizure uncertain, as US authorities grapple with the limits of their reach on foreign soil.​​​​​​​​​​​​​​​​