In case anybody encounters this problem.  I found the cause and solution.
The problem is that the property is multi-value:

                propertyDef.setName("my:IsFriendOf"); 
                propertyDef.setMultiple(true); 

The error message is kind of misleading; what is actually happening is that
the property exists, but with a different data type.  The problem goes away
by setting the property this way:

                Value val[] = new 
Value[]{session.getValueFactory().createValue(jane)};
                joe.setProperty("my:IsFriendOf", val);

I wish this error message was more informative. It should say something
about incompatible data types, rather than the "not found" misleading
message. 

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