JidbaaleThe complaint accuses Abdiwali Abdullahi of consumer fraud in how he advertised his projected Nolosha Development in Lakeville and wants reimbursements for “hundreds of families.”
The office of Attorney General Keith Ellison initiated legal action against the developer of a housing project in Lakeville intended for Somali families. Alex Kormann, The Minnesota Star Tribune
A Minnesota housing developer seeking to construct a 37-acre project targeting the state’s Somali-American population faces allegations of fraud from Minnesota Attorney General Keith Ellison.
Ellison filed the case in Hennepin County District Court on Wednesday, accusing Abdiwali Abdullahi of fraud over how he promoted and acquired down payments for Nolosha, his planned housing complex in Lakeville.
The complaint argues Abdullahi falsely promoted the houses, interest plans, building timeframes, and community amenities to clients wanting to secure a seat at Nolosha.
Many of the customers had been requested to pay $25,000 in down payments. The lawsuit wants to end Nolosha’s “misrepresentations and seeks full refunds for the hundreds of families who paid significant sums for their dream home.”
The action is billed as a mechanism to achieve “speedy relief” for consumers whom the Attorney General’s Office alleges are being refused refunds while the project continues to be delayed while an ongoing investigation plays out in court. It accuses Abdullahi and Nolosha with one count each of breaches of the prevention of consumer fraud act; violations of the uniform deceptive trade practices act; and violations of the false statement in advertising act.
Calls and messages to David Aafedt, the attorney who has defended Nolosha in past civil cases conducted by the Attorney General’s Office, were not responded.
The complaint says that Nolosha utilized false marketing materials and wording to recruit customers. The advertising suggested purchasers would obtain houses with three to five bedrooms for about $370,000 and $500,000. They stated sales will be done in conformity with Muslim teachings that ban collecting interest on a loan. They also referred to the development as Nolosha Lakeville, even though the firm did not have any building licenses when it started promoting the area.
The complaint says that Nolosha collected more than $1 million in “pre-reservations” from 160 potential customers. Once the 160 lots were spoken for, Nolosha started asking clients for $500 to be placed on a waitlist. There are now more than 1,500 clients in the queue.
The claim argues there is no plan for single-family dwellings at the site, which would instead be multi-family housing. Buyers will have to get either a standard mortgage with interest or “obtain a loan from a Sharia-compliant lender” that Nolosha knew would charge a “profit rate” on top of the cost of the property. It further argues that, “most egregiously,” consumers would not be able to move into Nolosha in 2023 or 2024 since the development will not be finished for “many more years at best.”
It further alleges that when the Attorney General’s Office demanded that Nolosha offer clients a complete refund owing to the delays, Nolosha refused.
The Attorney General’s Office says that Nolosha doesn’t own the development’s intended location in Lakeville but offered to acquire the property for $4 million in April 2023. Four extensions to the closing date have subsequently been granted, the latest putting that date on Nov. 10 and the price at $3.4 million.
Abdullahi has indicated he has a written purchase agreement for the property.
The complaint says that Nolosha has lacking even basic contact with Lakeville and has not presented a complete plan to the city concerning the development, much less begun ground. Attached to the complaint is a snapshot of the planned location, describing it as “just undeveloped wetlands.”
It accuses Abdullahi of benefiting himself as the “sole full-time employee of Nolosha,” collecting a salary between $2,000 and $4,000 per month.
Many of the other points in the case have been stated previously. Ellison’s office has been studying the development since 2023.
Nolosha says the probe started because of a dissatisfied employee. The Attorney General’s Office refers to the employee as a whistleblower.
That probe had not led to official claims of fraud until Wednesday, but both sides swapped public accusations about harassment and manipulation during a motion hearing in August, which was attended by scores of members of Minnesota’s Somali American community.
After that hearing, Judge Christian Sande determined Nolosha was required to give specific papers to the Attorney General’s Office. He also handed Nolosha a partial protection order against the Attorney General’s Office, stating the probe had drifted beyond the alleged offenses.
The Attorney General’s Office argues that, so far, Nolosha has not cooperated with the court order to give over material.
The next motion hearing in that lawsuit is set for Oct. 21.
