The federal investigation of Twin Cities real estate developer Ned Abdul appears to include John Barlow, Abdul's business partner in the Epic and Karma nightclubs.

Federal agents raided the homes and business offices of both men Tuesday, with discoveries leading them to execute a fifth search warrant later in the day at a bank, a source close to the investigation said. No charges have been filed.

Abdul, 41, lives in Deephaven, and his company, Swervo Development Corp., has its headquarters in the Butler North building near Target Field in Minneapolis. Barlow, 49, lives in a Warehouse District loft, and his contracting company, Blueprint Builders, is based above the Epic nightclub on the fifth floor of 508 1st Av. N.

In an interview Wednesday, Barlow said that the raids had nothing to do with the nightspots but that he didn't have details.

"This has to do with a business deal Ned was involved with through Swervo Development," Barlow said. "It has nothing to do with the nightclub businesses that we are running whatsoever."

Abdul, who also goes by Nedal Abul-Hajj, isn't talking about the situation.

Minneapolis lawyer Bill Mauzy, Abdul's lawyer, accused the agents from the Internal Revenue Service and U.S. Postal Inspection Office of taking "a real shotgun approach."

"They have hauled out literally hundreds of files and have not informed us of the focus of the investigation," he said. "I think there is no reason to believe there was criminal activity at these businesses."

Mauzy said he and Abdul will do their own investigation and examine copies of the records seized.

The raids have surprised real estate professionals who have watched Abdul's rise over the years from flipping houses in north Minneapolis to amassing a fortune in commercial real estate. Many of his holdings are in the Warehouse District, but Abdul has also invested in St. Paul and Detroit. His rapid rise at a relatively young age has drawn some envy. One leasing agent said Abdul has shown a Midas touch with tenants.

He's also drawn the ire of local unions. During the conversion of the former Whitney Hotel in Minneapolis into condos a few years back, they accused him of squeezing nonunion workers, such as paying day laborers cash and working them long hours.

"I'm not surprised that he's under investigation based on past practices that we uncovered five years ago," said Dan McGowan, chairman of the Twin Cities Development Task Force, a labor group focused on employment practices.

Abdul is no stranger to controversy. Court records show he filed for bankruptcy in 1992. His house flipping in the 1990s landed him in a dispute with a mortgage company, WMC Mortgage Corp., which sued him in federal court in 1999. The case was settled for an undisclosed sum. Records show he's also collected 25 traffic tickets.

Staff writer Dan Browning contributed to this report. Jennifer Bjorhus • 612-673-4683