Haji Osman Salad was running a business in December 2020 purporting to cook thousands of meals to feed needy children, raking in hundreds of thousands of dollars each month in government reimbursements.
Haji, 34, ultimately received more than $16 million in reimbursements from the federal child nutrition program, according to a federal indictment charging him with wire fraud, conspiracy to commit money laundering, and money laundering.
With money pouring in, he turned to real estate investment in early 2021.
That was poor timing for Deming Lai and Xiaoling Chen, a Chinese-immigrant couple who were about to close on their first home. The couple had been preapproved for a mortgage and planned to move into a four-bedroom, 1,700-square-foot home in March 2021.
But their planned transaction never materialized. Instead, the family ended up paying more money for less stability in a haphazard contract for deed transaction. Behind the scenes, several players helped them get to that point: a Realtor, a lender, and Haji—a mysterious middleman known for his flashy Range Rover and access to cash.
Haji purchased the house in question for $261,000 by using a cashier’s check from his business, Haji’s Kitchen. Then, he turned around and sold the modest one-story home in Blaine to Lai and Chen on the same day for a marked-up rate of $290,000—nearly $30,000 more than he had paid for it.
Lai and Chen didn’t know that Haji had allegedly used stolen money to buy the house. He is one of 70 defendants charged with defrauding the federal government in a widespread food-aid fraud scheme known as the Feeding Our Future scandal. Prosecutors say the alleged scheme cost the government more than $250 million in federal funds that were supposed to feed underprivileged children during the COVID-19 pandemic.
Haji is accused of leading a group of eight co-defendants that defrauded more than $50 million; two have pleaded guilty. Haji pleaded not guilty, and his case is pending.
Lai and Chen’s story offers a rare window into the collateral damage wrought by the frenzy of investments allegedly made by several of the Feeding Our Future defendants. Prosecutors allege that several suspects purchased millions of dollars in real estate, including several single-family homes, a church in Kentucky, and a beachfront resort in Kenya.
Lai and Chen are still paying the marked-up rate on their home and say it’s a financial hardship.
“You used illegal money to deal with me, so that’s not fair,” Lai said.
Haji allegedly spent $2.1 million of the government’s money on at least six properties, starting with Lai and Chen’s home, according to the indictment. Lai and Chen’s experience showcases some defendants’ strategies to grow their stolen wealth.
Haji and his attorney, Paul Applebaum, declined to comment for this story.
A growing family
Sitting in his living room surrounded by shelves of traditional Chinese wooden bracelets, Lai, 37, recalled the events that led him to Haji and the cast of characters he now views with suspicion. His young son watched YouTube videos on a TV nearby.
Slender with strong hands from years as a masseur, Lai moved quietly and precisely as he prepared tea for guests. But he became animated and exasperated as he described the odd and infuriating process of buying his home, which began with a chance encounter at work.
Lai moved to Minnesota in 2007 from Nanning, China, to be near his mother, who had previously immigrated to the Twin Cities to marry her husband. He works as a massage therapist at a studio in Blaine’s Northtown Mall. He and Chen lived in apartments in Crystal for years, but wanted more space after the birth of their son.
The whole entire transaction was unique, creative, and a headache.
Jenna Bruski, Realtor
Jenna Bruski walked into Lai’s workplace in 2015. Bruski was suffering from bulging and herniated discs in her back from a car accident, and sought out a massage therapist as part of her prescribed medical treatment. Before long, she was making regular appointments with Lai.
Lai told her in 2020 that his family was looking for a house. Bruski, a licensed Realtor in Minnesota since 2014, offered to help. Friends urged Lai to consider using a Chinese American realtor, but Lai considered Bruski not just a loyal customer, but a friend. He felt he owed her his business.
“She helped me, so I helped her,” Lai said.
But the decision backfired, resulting in months of conflict and thousands of dollars in extra costs for his family, Lai said. Bruski seconded this.
“The whole entire transaction was unique, creative, and a headache,” Bruski said.
Initially, Lai and Chen wanted to buy a home in Crystal or Brooklyn Park near his mother. But when Bruski told them about a house in Blaine, close to Lai’s workplace, they listened. Chen is a factory worker in nearby Fridley. The location made sense.
Bruski connected Lai with a broker—Mohamed Jama of Optima Lending. Lai planned to put $10,000 toward a down payment.
“But then it all changed,” Lai said.
‘Hard money guy’
Lai said that just days before he and his wife were set to close on the home in March 2021, Mohamed called him and told him there was a problem.
What happened next is disputed. In Lai’s account, Mohamed told him to bring in stacks of financial documentation on an impossible deadline to verify that he could obtain the mortgage loan.
Mohamed sat on Lai and Chen’s loan application for 45 to 60 days and didn’t act until the last minute, Bruski said, leading to a hectic final few days that culminated with the deal falling through.
Mohamed said Lai initially reported making enough money to pay for the mortgage. But, Mohamed said, when he ran Lai’s information through the IRS, he found out that wasn’t true.
Whatever the cause, Lai and Chen’s mortgage application fell through. All of a sudden, the deal Lai was prepared to sign—purchasing the Blaine house for $270,000 with a conventional home loan—disappeared.
We never bought a home before, so we didn’t know what the procedure is.
Deming Lai, homebuyer
Lai had already given notice to his apartment’s management that his family would move out. He needed a quick solution. He felt trapped.
But Bruski told him they could still move into the Blaine house on March 1 even without a mortgage, Lai said. That sounded odd to Lai, but he felt he had no other options.
“We never bought a home before, so we didn’t know what the procedure is,” he said.
Lai realized he made a mistake soon after they moved into the house without signing any documents. He and his wife wanted to leave, but Bruski told them they couldn’t, according to the couple.
“You like the house, right?” Lai recalled Bruski asking him at the time.
Bruski denied Lai’s account, and said she tried to help Lai and Chen find a new property. However, Bruski said, the couple wanted to stay in the house.
Lai said Bruski presented the couple a new option: buy the house through a contract for deed, an alternative homebuying method where the purchaser can buy the home directly from the seller without using a bank. They would need to find a cash buyer who could buy the house conventionally and then turn around and sell it directly to Lai and Chen on the same day.
Bruski said Mohamed came up with the contract for deed plan. Mohamed, however, said it was Bruski’s idea.
Contracts for deed are legal in Minnesota but lightly regulated. A 2022 joint investigation by Sahan Journal and ProPublica found a growing market in contract for deed sales, and complaints from buyers that they didn’t understand how unfavorable their contracts were.
The investigation found that real estate investors frequently bought and resold homes on the same day, often for tens of thousands of dollars more. Contracts for deed typically have a payment timeline that is far shorter than the conventional 20- to 30-year mortgages used in traditional home sales. That means contract for deed buyers have less time to pay off their home, and often have to make a large “balloon payment” at the end of their contract for the remaining cost of their home, or face foreclosure.
The Sahan Journal-ProPublica investigation prompted U.S. Senator Tina Smith, a Democrat from Minnesota, to introduce federal legislation in February that would reform contract for deed sales across the country. Two Minnesota lawmakers also introduced legislation to crack down on the practice on a state level, and the Minnesota Attorney General’s office announced last year that it’s investigating the practice. The Attorney General’s office recently posted a consumer warning about contract for deed sales.
He was very young, and I think he had a flashy car—a Range Rover.
Mohamed Jama, a broker with Optima Lending
Mohamed said in an interview last May that he recommended that Haji act as the middleman in the contract for deed sale. Mohamed said he had met Haji a few times and knew him as a “hard money guy” for big purchases.
“He was very young,” Mohamed said, “and I think he had a flashy car—a Range Rover. No 30-year-old can afford that car without being an athlete or a musician.”
In a subsequent interview later last summer, Mohamed changed his story and denied that he connected Bruski to Haji. Instead, he said he recommended three other “millionaires and billionaires” as potential middlemen for the purchase, and stated that Bruski found Haji on her own. Bruski denied this, and said she met Haji through Mohamed.
In both interviews, Mohamed said he did not participate in Lai and Chen’s purchase once Haji got involved.
On March 19, 2021, nearly three weeks after Lai and Chen had moved into the Blaine home, Haji received a cashier’s check for $259,008 from his company, Haji’s Kitchen, to pay for the house, according to a federal indictment charging him in the Feeding Our Future fraud case.
Anoka County records show that Haji purchased the house for $261,000 from the original seller. Then, working with Bruski, Haji sold it to Lai and Chen via contract for deed at a marked-up rate. Feeling stuck, Lai agreed to purchase the house for $290,000, immediately paying $20,000 towards the cost of the house and making approximately $1,700 monthly payments directly to Haji.
Realtors like Bruski rely on commissions of a home’s final sale to pay their salaries. These typically average between 5 and 6% of a home’s final sale price, according to RealTrends, a professional trade publication for real estate agents. Lai recalled Bruski sending him a large, multipage document, which he signed without reading the fine print.
“My English isn’t well like that,” he said of why he didn’t read the document more thoroughly. “I trusted her.”
Bruski said she explained the process to Lai four times, including a meeting with Lai’s father-in-law, a native English speaker. But Lai said at all those meetings, she assured him that everything would be fine.
Lai said he was frustrated with the process and that it felt off. He was unaware of the Feeding Our Future investigation when he signed the contract for deed in early 2021. Information about Haji’s alleged role in the fraud wasn’t made public by federal authorities until September 2022, yet that news didn’t reach Lai until Sahan Journal reporters notified him in spring 2023 about the charges against Haji.
But when he was informed about the alleged theft that led to Haji’s involvement in the home sale, Lai became both upset and hopeful. If stolen money was used in the deal, Lai thought to himself, there was a chance to recoup the $20,000 cash payment to Haji.
“They’re cheating,” Lai said.
Bruski, who is not named in the Feeding Our Future case, said she did not know about Haji’s alleged wrongdoing until an FBI agent interviewed her months after Lai had purchased the house.
The alleged food-aid fraud involved sponsor organizations like Feeding Our Future receiving federal funds through the Minnesota Department of Education. The sponsor organizations then distributed those funds to food vendors and food sites, such as Haji’s business, which were supposed to provide ready-to-eat meals to local children.
Several organizations in the money chain reported serving thousands more meals than they actually did, or simply never served any at all in order to receive more federal reimbursement dollars, according to prosecutors. Those funds were then passed through various shell companies before allegedly being pocketed by the perpetrators.
‘A red flag’
It became increasingly difficult for Lai and Chen to make ends meet in 2021 between their home payments, inflation, and rising interest rates. After weeks of working hard to make the monthly payment on their house, Lai and Chen reached out for help.
Their insurance agent referred them to Joni Pruett, a Twin Cities loan officer with 20 years of experience who often works with immigrant families.
“He was desperate,” Pruett said of Lai.
Pruett saw something strange in Lai’s contract for deed. It was only a four-month contract. Most contracts for deed are five-year agreements, and are generally at least a year long.
“That was a red flag,” Pruett said.
Under the contract, when the four months ended on July 31, 2021, Lai would have to pay the entire balance of the contract—$270,000—to Haji. If he didn’t, Haji could cancel the contract and repossess the house. Lai would lose his down payment and all the monthly payments up to that point, which totalled about $27,000.
In my eyes, they were intending to take the property.
Joni Pruett, loan officer
Lai and Chen said that when they first bought their home, Bruski told them they’d be able to refinance it in a few months, and that Haji would let them stay and pay what would essentially amount to monthly rental payments while they figured out a refinancing plan.
But that didn’t happen. Instead, Haji initiated a process in August 2021 to cancel the contract and repossess the house, because the four-month timeline for the contract ran out, according to a notice of cancellation document Lai provided to Sahan Journal.
Bruski said she didn’t know why Haji moved to cancel the deal. She said the contract for deed was set up as a four-month agreement instead of a five-year agreement because Haji wanted to be paid quicker.
But Pruett believes the goal was to try to sell the house again.
“In my eyes, they were intending to take the property,” she said.
Pruett began negotiating with Haji and Bruski. She offered to do a direct purchase, and was able to get Lai and Chen a conventional home loan for $290,000. That took work and experience, but Pruett said the hardest part was dealing with Haji and Bruski.
“There were plenty of times where I fought with them verbally,” Pruett said.
Bruski said she and Pruett “butted heads” at the beginning of negotiations. She attributed this to the uncommon nature of the transaction. But she contended that things got better as negotiations went on.
“We were working together,” Bruski said.
Pruett denied that characterization, and said that Bruski declined to meet with her to plan out a way to get Lai out of the contract for deed.
“She told me to back off,” Pruett said.
Luckily for Lai, Pruett didn’t. Haji wanted a $10,000 payout to exit the contract for deed, according to Pruett, who pleaded with him to lower the amount. When Haji threatened to cancel the contract on the house, Pruett called his bluff.
She told him no judge would side with him over Lai, because of how little time the contract gave Lai to pay off the house, and given that Lai was originally approved to buy the house for $270,000 with a conventional home loan before Haji came into the picture.
“It’s predatory,” Pruett said of Haji’s maneuvering.
Haji ultimately did not get the payout.
In August 2021, when Haji moved to cancel the contract for deed, he started a second company aimed at getting more cash from the federal child nutrition programs, according to the federal indictment against him. His new venture, called US Halal Foods LLC, was a shell company used to launder money, prosecutors say.
Despite getting out of the contract for deed, the new mortgage continued to strain Lai’s finances. Lai’s bank moved to foreclose on the house this winter. He’d missed payments after several slow months at work. Faced with a foreclosure date at the end of January 2024, Lai borrowed money to make back payments and keep the home.
‘One problem after another’
Bruski was involved in at least three real estate transactions with Haji, according to public property records, real estate listings, and interviews. The Blaine sale involving Lai is the first recorded real estate transaction prosecutors say Haji made using allegedly stolen funds.
Bruski characterized her business relationship with Haji as “sporadic and on and off.” She said she began to grow leery of working with him before being approached by the FBI.
“It was always a headache and a hassle, one problem after another,” she said. “He’d go for one property and then change his mind and jump for another one. He was rubbing me the wrong way. So, I started shying away from him then.”
Bruski said she didn’t know anything about Haji’s alleged fraud while working with him, but grew concerned once the FBI approached her and stopped doing business with him for good.
Bruski’s real estate history is chronicled in public business and court records that reveal ethical issues and professional conflict with others.
The Minnesota Department of Commerce fined Bruski $5,000 in December 2020 for not acting in the best interest of her clients, according to state real estate records, which did not provide further details. Bruski said this stemmed from a client who built a new home.
According to Bruski: The client asked if it was necessary to get an inspection. Bruski told the client she could, but that she didn’t have to because the home had a construction warranty.
The client ended up finding problems with the home and reported Bruski for not advising an inspection, according to state records.
Bruski said she recommended the inspection, but has no proof of that because it was made verbally.
Real estate records show that Bruski bought a home in Coon Rapids from Haji the same day he purchased it in April 2021 for $282,000, also using money federal prosecutors say was stolen in the Feeding Our Future case. Bruski said she couldn’t get approval to buy the house on her own, so Haji financed it for her. She rented that property to tenants, Sahan Journal found during a visit to the address.
The home was then sold in April 2023 to a major player in Minnnesota’s contract for deed real estate world, who then turned around and sold it that June for $230,000, property records show.
Bruski was also listed as the real estate agent on a 37-acre undeveloped plot in Lakeville that prosecutors allege was purchased for $2.5 million by Haji and others charged in the Feeding Our Future investigation. The owner listed for the property is described by federal prosecutors as an “unindicted co-conspirator” in the Feeding Our Future scandal, according to federal court documents and Minnesota business license records.
Sahan Journal is not publishing the buyer’s name because they haven’t been charged with a crime. Bruski said she didn’t work with Haji on the Lakeville property, but acknowledged that Haji loaned the buyer money and was paid back. Haji invested $437,000 in stolen money into that land, prosecutors allege in the indictment against him.
Little recourse for Lai
Since learning that Haji allegedly used stolen money to buy the Blaine house, Lai has been on the hunt to recoup the $20,000 cash payment he made to Haji for the contract for deed. But legal experts say that while Lai may have been wronged, he has no clear path to restitution.
Larry Wertheim, a Minneapolis real estate attorney who has experience with contract for deed cases, said Lai’s house should not be in danger of being seized by the federal government in an effort to recoup money allegedly stolen in the Feeding Our Future case. Authorities have seized several properties and other belongings that remain under the ownership of defendants in the case.
Lai and the bankers who lent him money to buy the home were not aware that Haji had paid for it with allegedly stolen money, which protects them against forfeiture, said Wertheim, who was not involved in Lai’s home purchase.
The fact that he paid too much for it has nothing to do with the fact that the guy used stolen money to buy it in the first place. There’s no connection.
Larry Wertheim, Minneapolis real estate attorney
Lai also likely doesn’t have a legal remedy against Haji, Wertheim added. That’s because buying a home for a lower price and turning around and immediately selling it at a higher price in a contract for deed is “interesting, but not unusual,” he said.
“The fact that he paid too much for it has nothing to do with the fact that the guy used stolen money to buy it in the first place,” Wertheim said. “There’s no connection.”
Colleen Daly, a consumer attorney with Mid-Minnesota Legal Aid, said Lai may have a legal claim against Bruski if she served as his Realtor and intentionally misled him about details of the transaction. An example of misleading a buyer could include not informing them that the seller had purchased the house at a lower price than what the buyer paid for it, she said.
“If you’re someone’s real estate agent, you have a fiduciary duty to that person to act in their interest,” Daly said. “The Realtor can’t keep secrets from you to benefit other parties.”
It’s hard to know how many bystanders like Lai got roped into real estate deals with suspects in the Feeding Our Future case. Federal indictments show that at least 20 properties were purchased with allegedly stolen money. Since federal authorities first announced charges in the case in fall 2022, 70 people have been charged and 17 have pleaded guilty. U.S. Attorney Andrew Luger called it the largest case of pandemic fraud in the country, and said recovering the $250 million lost is a priority.
Tracking down the millions tied up in real estate transactions and other purchases, which included luxury vehicles, might help balance a government ledger, but there’s no clear way to track the collateral damage of that stolen money—or provide relief to those hurt when defendants allegedly used the money to profit further.
The federal government has seized around $7 million from bank accounts tied to Haji and three vehicles and several properties he purchased, according to the indictment against him.
Lai met lawyer Taweh Anderson in his massage studio. In July 2023, Lai ventured to Anderson’s law office. Dressed in a red T-shirt and jeans, he laid out the strange story of his home purchase, animatedly pointing out discrepancies in the process. He came prepared with documents, and outlined the federal charges against Haji.
He was wronged, Anderson explained to Lai, and would likely have a compelling case in civil court against Haji. But the prospect of receiving payment from Haji for damages would be incredibly slim, Anderson told him.
For starters, the government already seized everything Haji had.
“You can’t sue someone who doesn’t have any money,” Anderson told Lai.
Lai understands there’s no clear path to recovering his losses. Three years have passed since Lai and Chen purchased their house, but the pain, anger, and disillusionment is still fresh on Lai’s face and in his voice when he recalls the situation.
Lai finds comfort in his home, but that doesn’t stop him from wanting the $20,000 he paid Haji back, and some kind of justice against the people who nearly destroyed his family’s financial wellbeing and dreams.
“I don’t know how to get the money back,” he said.
