Minnesota Attorney General Advocates for Community in Fraudulent Housing Case

MINNEAPOLIS, Minn (AX) — In the picturesque city of Minneapolis, a legal drama is unraveling that echoes a broader narrative of trust, betrayal, and resilience in the Somali-American immigrant community. Minnesota Attorney General Keith Ellison has urged a judge to compel Nolosha Development to refund substantial deposits from Somali-American families who found themselves ensnared in a web of unkept promises and dreams deferred. These families, hopeful of owning homes that were never built, face allegations of consumer fraud and deceptive practices.

This month, a motion unfolded from the Attorney General’s Office alleging that Nolosha had collected over $1 million from more than 160 hopeful homebuyers. What these buyers received in return was never land ownership, nor the sight of permit applications, or secured financing for their dreams in Lakeville. The state has sought a default judgment against the entity and its CEO, Abdiwali Abdullahi, citing an alarming disregard for court orders and a conspicuous absence of legal representation.

“For over a year, defendants have refused to provide basic information,” states Assistant Attorneys General Mark Iris and Katherine Kelly in a poignant court filing. “This has greatly prejudiced our case and delayed justice for victims.” In the heart of this battle are people like Abdulkarim Mohamud, a Metro Transit dispatcher, who, alongside his cousin Siraji Noor, invested $25,000 each during a promotional event by Nolosha in 2022. The event promised a wonderland of sorts: home ownership intertwined with culture in a Somali-centric development featuring scenic lakeview homes, a mosque, a school, and halal dining options — all offered with Islamic, interest-free financing.

“It sounded like an amazing opportunity to grow the Somali community and the culture,” Abdulkarim recollected in a sworn affidavit. He envisioned this house as an extraordinary wedding gift for his son, Muhammed Mohamud, who later took the helm in their family’s quest to recover their funds.

The pitch from Nolosha echoed simplicity and appeal: pay a set monthly rate for 20 years while enjoying these homes. The nuance? Buyers could not sell during this period, and backing out would revert ownership to Nolosha. Although marketed as pre-reservation fees, the $25,000 payments did not guarantee housing — a detail buried in the fine print. Abdulkarim and Siraji were allegedly informed contrary to this, with promises of matched deposits due to realtor fee savings.

Yet, what unfolded was a tapestry unraveling at the seams. Nolosha increased property prices, did away with single-family homes, and ultimately, the vision of a 37-acre development dwindled when the purchase agreement for the land was canceled in December 2024. A shocking revelation from the Attorney General’s Office connected the land to the infamous $250 million Feeding Our Future federal fraud case. The U.S. government had marked the parcel with a notice of lis pendens in 2022, anticipating its seizure after the sentencing of involved defendants.

“Buying stolen land is worse than paying interest,” asserted Abdulkarim. “What was supposed to be an amazing gift turned into a nightmare.”

The city’s concerns painted a similar picture. Lakeville Planning Manager Kris Jenson indicated in an affidavit the absence of formal permit submissions and emphasized the site’s challenging topography and wetlands. These misalignments compounded the doubts about the project’s feasibility.

While families anticipated homes ready by November 2023 following a fall 2022 construction start, nothing materialized. Muhammed Mohamud noted Nolosha’s blames on Lakeville’s bureaucratic rigors, but city records revealed Nolosha’s lack of municipal engagement until late 2023.

Exasperation brought Muhammed to social media, where a TikTok video rallying for accountability caught attention. Ironically, the next day, communication from Abdiwali promised a refund — accompanied by a deceptive tracking number. Two $25,000 checks followed but met brutal fates as they bounced.

The Attorney General’s Office reported a staunch refusal from Nolosha to submit crucial documents, like a customer list and financial records, impairing the state’s investigative capacity. Legal counsel deserted the company, reminiscent of a ship abandoned in a storm, just as court deadlines loomed.

Curiosity stirs as the FBI widens its gaze on Nolosha, extending the scope beyond the state’s civil case. Partial refunds trickled to select clients, yet penalties marred these restitutions. “This all caused a lot of financial and emotional stress for my family,” shared a client in an affidavit.

Bold promises of social determinants of health and generational wealth ensconced in public health credentials highlighted Nolosha’s appeal, seducing crowds and attracting official praise as seen in a video by Minneapolis City Councilmember Jamal Osman.

Yet, reality defaulted on these promises. Disappointment found voice in Siraji’s words, “This guy is a thief. I don’t know what he’s doing with the money.”

The countdown ticks towards April 29, the day set for Hennepin County District Judge Christian Sande to deliberate on the state’s pursuit of a default judgment and sanctions.