The Minnesota Attorney General’s Office is investigating a proposed housing development in Lakeville that has already collected more than $1 million from customers and is under suspicion that it “may have and may be engaging in deceptive sales practices.”

The AGO is now asking a judge to force Nolosha Development to provide more information about its long-delayed plans to build 160 homes for Somali-Americans on 40 acres of land in Lakeville, according to a new court filing obtained by 5 INVESTIGATES late Thursday.

“Despite representing to customers that their reserved homes would be “move-in ready” in November 2023, the reality of the development project is bleak,” wrote Mark Iris, Assistant Attorney General.

Nolosha and its owner, Abdiwali Abdullahi, deny violating any laws and call the allegations of state investigators “baseless.”

“The motion is without merit and is based upon misinformation being spread by a disgruntled former intern, as well as competitors of Nolosha,” Abdullahi wrote in a statement to 5 INVESTIGATES. 

Feeding our Future complications

The AGO’s motion notes that the same land Nolosha is trying to develop is also tied up in legal action connected to the federal government’s unrelated fraud investigation of the nonprofit Feeding Our Future. 

In court records, federal investigators accuse several defendants of once using money from the fraud to purchase the property which is now under different ownership.

Nolosha provided 5 INVESTIGATES with email records showing that it has been in contact with the U.S. Attorney’s Office about releasing the property, but state investigators say “numerous hurdles” still stand in the way of Nolosha completing the purchase of the land. 

“After signing his first contract with a customer in October 2022, Mr. Abdullahi has worked exceptionally hard to obtain over a million dollars from customers but has done almost nothing to make progress in developing Nolosha Lakeville,” the AGO wrote in its motion.

Refunds in question

State investigators say they are also looking into complaints of customers who say they were unable to get their money back as delays with the project dragged on. 

“Nolosha has modified its cancellation policy over time; initially customers were required to forfeit 10% of their $25,000 payment if they asked to cancel but at one point Mr. Abdullahi switched his 4 contractual terms so that he can keep 20% of their payment if they cancel for any reason,” the AGO wrote in its motion.

Abdullahi insists his customers remain committed to the project and that he has “1,400 families on our waiting list.”

He has not responded to questions about whether customers who want their money back now will get a full refund. 

“Nevertheless, we won’t let this distract us and will continue to focus on our work to build a united and thriving community,” Abdullahi said.

Nolosha has not said whether it plans to comply with the Attorney General’s demands for more information.