A troubled housing development geared toward East African immigrants now faces default judgement for not cooperating with a state investigation and lawsuit into alleged fraud.
Hennepin County District Court Judge Christian Sande granted the Minnesota Attorney General’s Office request to end its lawsuit against Nolosha Development by ruling that the company violated the Prevention of Consumer Fraud Act, the Uniform Deceptive Trade Practices Act and the False Statement in Advertising Act.
Sande ordered Nolosha to pay civil penalties, compensatory damages and restitution to clients who paid deposits for homes in the development.
In his ruling, Sande wrote that default judgement is “appropriate, and frankly, the only remedy to move this case to conclusion.”
“The Court gave Defendants several unequivocal opportunities to defend themselves and to participate in this lawsuit,” Sande wrote in his ruling. “Instead, Defendants chose to ignore the Court’s orders and refuse to comply.”
Sande will hold a future evidentiary hearing to determine how much Nolosha must pay back to its clients. During the most recent court hearing in the case held this past spring, Nolosha CEO Abdiwali Abdullahi told the court that his company didn’t have enough money to pay for its own attorney.
At least 160 prospective homeowners, many of them Somali, have paid Nolosha deposits of up to $25,000 per home to live in a proposed development in Lakeville. The Attorney General’s Office estimates that Nolosha received at least $1 million from its clients.
But Nolosha never owned the Lakeville land it has pitched to customers since mid-2022, never broke ground for construction, and never obtained city permits to build homes. Marketed as a dream community for East Africans, the planned suburban development promised to feature lakefront homes, a school, a mosque, restaurants and a grocery store.
During the course of its investigation, the Attorney General’s Office asked Nolosha to hand over several documents, including promotional materials and a full client list.
When Nolosha refused to hand over the documents, the office filed a lawsuit in October 2024, accusing Nolosha of consumer fraud, deceptive trade practices and false advertising. The lawsuit also asked a judge to force Nolosha to comply with the attorney general’s request for documents.
Sande ordered Nolosha last August to hand over the documents. Nolosha still hasn’t complied, even though Sande gave the company more time earlier this year and lectured Nolosha CEO Abdiwali Abdullahi multiple times.
“It’s time for you to take this matter seriously,” Sande told Abdullahi Abdullahi during a January court hearing. “Mr. Abdullahi, this just isn’t going to work.”
Abdiwali Abdullahi didn’t hand over any documents by the time the company appeared at another court hearing in late April, where he asked for more time to comply. By then, Nolosha had gone through two different legal teams and spent most of the year without legal representation.
“Obviously, I’m not going to grant a continuance,” Sande told Abdiwali Abdullahi at the April hearing. “This has just gotten preposterous, frankly.”
During that hearing, Abdiwali Abdullahi read a prepared statement blaming Nolosha’s troubles and “reputational damage” on the attorney general’s investigation, its lawsuit and the resulting negative media coverage. Abdiwali Abdullahi said those three factors prompted clients to back out of the development.
“We’ve waived cancellation fees for many families who backed out of fear, because we understood the pressure they were under,” he said at the time.
This put Nolosha under financial strain and led to its inability to pay for a lawyer, he said.
Abdiwali Abdullahi told Sande at the April hearing that he was “working on a solution.”
“I’m in the process of forming a special purpose vehicle, or SPV, with community supporters to raise the funds needed to retain legal counsel and fully comply and participate in this case,” Abdiwali Abdullahi said.
He told Sande that he would need 30 days to “finalize this funding structure and retain council.” Nolosha still does not have an attorney, according to court records.
