Attorney General Keith Ellison filed a lawsuit Wednesday against the company behind the proposed Nolosha housing development in Lakeville, charging it with consumer fraud, deceptive trade practices and false advertising.
The lawsuit against Nolosha Development LLC and its CEO, Abdiwali Abdullahi, comes a day after Nolosha made two social media posts attacking its former intern, Ammaar Ahmed, who reported concerns about potential fraud to federal and state authorities.
The development is geared towards East African homebuyers, and aims to build 160 housing units, a mosque, a school, restaurants and more on a 37-acre parcel of land. Nolosha does not own the property.
“Promising your customers the world, taking massive upfront payments from them, then failing to deliver on those promises is fraud, plain and simple,” said Ellison’s statement. “After numerous complaints to my Office, we discovered a pattern of fraudulent behavior on the part of Nolosha and we are taking action to bring it to an end.”
The Attorney General’s Office opened an investigation into the troubled development about a year ago. A Hennepin County judge recently ordered Nolosha to hand over documents it was withholding from the state as part of the investigation.
Nolosha came under scrutiny for taking $25,000 pre-reservation fees from prospective homeowners. The land is held up in the Feeding Our Future case because it was bought with money that was allegedly obtained fraudulently.
The FBI is also investigating Nolosha.
A spokesperson for Nolosha declined to comment on the matter. Abdiwali and Nolosha attorney David Aafedt did not return messages seeking comment.
The lawsuit and Nolosha’s social media posts mark an escalation in the case. In two posts, Nolosha’s Instagram account shared a picture of Ammaar, calling him a “disgruntled intern” and his allegations “baseless,” “lies” and “false claims.”
In an interview with Sahan Journal, Ammaar said the social media posts amounted to retaliation. Ammaar, 22, who is studying criminal justice at Normandale Community College, said he is worried about his safety.
Ammaar said he worked for Nolosha for six months in 2023. His job duties consisted of handling Excel spreadsheets and greeting prospective homeowners who came to the Nolosha office for meetings.
“Nolosha collected $25,000 from 160 families,” Ammaar said. “These are families that are low income and living on public assistance, and they are aspiring to be homeowners.”
Toward the end of his internship, Ammaar learned that Nolosha actually didn’t own the land it was selling pre-reservation agreements for. Instead, he learned, the land was tied to the Feeding Our Future fraud case. He grew suspicious.
“It made me feel that the company is defrauding the community and making false promises,” Ammaar said.
He reported his concerns to the FBI and Minnesota Attorney General’s office in the fall of 2023.
Deceptive marketing
Although the parcel Nolosha wants to develop is an empty plot, Nolosha advertised high-end homes with spacious backyards for sale between $370,000 and $500,000, according to the lawsuit.
Nolosha’s marketing materials showed renderings of single-family homes and storefronts, and used past-tense language like “the first community built from the ground up” to deceptively portray a development that was already up-and-running, the lawsuit alleges.
One of Nolosha’s marketing materials described the development’s “construction site … located behind Super Target in Lakeville” despite the fact that no construction site existed, the lawsuit states. Nolosha deceived customers during face-to-face meetings, encouraging them to sign up for pre-reservation agreements, the lawsuit alleges.
“During the in-person sales pitch Defendants also played their marketing video that shows a beautiful community with large single-family homes in walking distance to Halal shops and other non-residential facilities,” the lawsuit reads.
The Attorney General’s Office learned of Nolosha in 2023 after “numerous complaints were received from the public that Nolosha was engaging in business fraud and that Nolosha Lakeville was being falsely advertised,” according to the lawsuit.
Nolosha also told customers that the development’s first phase of homes would be built and move-in ready by November 2023, with more homes opening in May 2024. To date, neither have happened.
“By representing that they were selling parcels of land and that they would build single family homes on the land by way of no-interest 20-year payment plans, none of which is true, Defendants committed fraud and engaged in unfair and unconscionable practices that financially harmed hundreds of Minnesotans,” the lawsuit reads.
Earlier this year, Abdiwali testified in a deposition related to the investigation that the pre-reservation agreements don’t promise clients a home and don’t amount to downpayments.
Nolosha has collected a little over $1 million from customers, falling well short of the $4 million it will cost to buy the Lakeville land, according to the lawsuit. Nolosha has stated that it’s on track to complete the purchase next month.
Several Nolosha customers tried to get out of their deal and sought refunds, which the developer wouldn’t grant, the lawsuit alleges.
Whistleblower faced blowback early
Assistant Attorney General Mark Iris told a judge at an August hearing that his office was concerned about retaliatory actions Nolosha and its supporters had allegedly taken against Ammaar. In particular. he mentioned, Abdiwali’s sister, Hamdi Elayas Abdullahi, was charged in Carver County with felony harassment for allegedly impersonating Ammaar on social media accounts.
Hamdi allegedly created fake social media accounts impersonating Ammaar, and posted antisemitic, homophobic and sexist comments, according to a criminal complaint.
Aafedt, Nolosha’s attorney, emphasized at the August hearing that Hamdi is not a Nolosha employee, and admonished the Attorney General’s Office for asking provocative questions related to the social media posts during Abdiwali’s deposition.
Aafedt and Iris argued the issue at a civil court hearing linked to two civil investigative demands the Attorney General’s Office filed late last year and early this year compelling Nolosha to hand over marketing materials and a full client list. A judge ordered Nolosha to comply with the demands; Nolosha is appealed the ruling. The attorney general’s lawsuit states that Nolosha is in violation of the civil investigative demands.
The judge also ordered the Attorney General’s Office to keep its investigation within the bounds of consumer fraud, and told Iris his office could open a witness tampering investigation if it wanted to address other issues.
Nolosha’s recent Instagram posts blame Ammaar for its troubles, and detail his failed effort in court to obtain what he believed were wages owed to him. The social media posts say Ammaar reported Nolosha to the authorities as retaliation for losing his wage claims in court.
They also post pictures of Ammaar, and allege that he “stole a partial client list from Nolosha and provided it to the state.” The posts allege that the attorney general used the list to contact clients. The social media posts also contradict some claims in the attorney general’s lawsuit, claiming that no Nolosha clients have proactively complained to the state about Nolosha.
“Ammaar Ahmed’s retaliatory campaign not only undermines Nolosha but also perpetuates racist and Islamophobic narratives about fraud within the Somali community,” the posts read.
The posts criticize the attorney general’s investigation as “oppressive and misguided,” and say the office is “seeking the identities of Nolosha’s clients to spread misinformation, harass the East African community, and tarnish Nolosha’s reputation.”
“Nolosha acknowledges the State’s authority to investigate complaints, but that authority is not unlimited,” one post reads. “It is bound by Minnesota laws and civil procedures, which are designed to prevent harassment, embarrassment, and oppression. The State must follow these rules, and it cannot continue this investigation without regard for the law and the truth.”
Both posts urge people who’ve been contacted by Ammaar to contact Nolosha.
The Attorney General’s Office declined to comment about the social media posts.
Ammaar said Abdiwali and Nolosha haven’t been held accountable, and that the ongoing investigation by the attorney general “highlights how these inexperienced developers, who do not own homes and work as public health specialists, have harmed the community while exploiting low-income individuals seeking homeownership.”
He said claims that he is motivated by retaliation are “false and without merit.”
“Nolosha Development has failed to construct homes for families and has defrauded the Somali community by selling properties that do not exist, taking advantage of vulnerable individuals in the process,” Ammaar said.
