by Luke Sprinkel
In a lawsuit filed by Minnesota Attorney General Keith Ellison, an Eden Prairie business is accused of engaging in deceptive trade practices and defrauding Somali families.
Founded two years ago by “passionate Somali-American public health professionals,” Nolosha Development, LLC says it seeks to “address the housing disparity affecting East African households in the Twin Cities.” As such, the company allegedly has been working on the construction of a housing development in Lakeville called “Nolosha-Lakeville.”
Nolosha has promoted its planned Lakeville development as a place that “will be a valuable asset to the East African community in Minnesota.”
Last week, the Minnesota Attorney General’s Office (AGO) filed a civil lawsuit against Nolosha and its owner, Abdiwali Abdullahi. That lawsuit accuses the company of accepting large sums of money from customers after dramatically misrepresenting the development.
Filed in Hennepin County Court, the AGO’s lawsuit says Nolosha violated the Prevention of Consumer Fraud Act, the Uniform Deceptive Trade Practices Act, and the False Statement in Advertisement Act.
According to the lawsuit, Nolosha “sells purported ‘Pre-Reservations’ for homes in a to-be-constructed housing development in Lakeville, Minnesota.” The AGO lawsuit states that Nolosha’s “sales pitch to prospective customers was that for a deposit of $25,000 they would secure their own plot of land for a single-family home and then they would choose how many bedrooms and bathrooms they wanted.”
The AGO says Nolosha “promised that they would then complete the home for the customer, all with just the $25,000 deposit that was required up-front.”
Nolosha allegedly said its development would have large single-family homes, no-interest 20-year payment plans, and nearby community amenities such as an Islamic school; a mosque; and Halal food markets. Furthermore, Nolosha reportedly told customers that the homes would be completed in two stages; with one group of homes being completed in November 2023, and more homes finished in May 2024.
However, the AGO says “the company has not bought the land, obtained necessary permits, nor hired a construction company to even break ground.” Furthermore, the lawsuit states that “no ground has even been broken in the development, the homes are years away from being built, no single-family homes will be available, and [Nolosha] will not sell the homes on no-interest payment plans.”
Despite this, Nolosha was allegedly collecting tens of thousands of dollars from families who were hoping to move into the “Nolosha-Lakeville” neighborhood. The AGO said more than $1 million was collected from customers who put down “Pre-Reservation” deposits. Nolosha also charged other customers $500 for a place on a waitlist, according to the lawsuit.
“In reality, Defendants misrepresented and lied about numerous features of their development,” says the AGO’s lawsuit.
“If you are selling a product, you need to be honest with your customers about what that product is,” said Attorney General Ellison. “Promising your customers the world, taking massive upfront payments from them, then failing to deliver on those promises is fraud, plain and simple. 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.”
According to the AGO, Nolosha has repeatedly refused to comply with a court order that would force the company to turn over certain information. As such, the attorney general “filed this lawsuit to protect the public and obtain speedy refunds for Nolosha’s customers who feel that the project was misrepresented to them.”
Alpha News reached out to both Nolosha Development, LLC and a public relations firm representing the company. Neither provided comment for this story.
However, Nolosha recently posted a message on its Instagram page in which it described the AGO’s actions as a “baseless investigation.” The company said the investigation “stems from misinformation being spread by a disgruntled former intern” and “competitors of Nolosha.”
Nolosha also said it acknowledges “the State’s authority to investigate complaints, but that authority is not unlimited.”
In its Instagram posts, the company said it holds “a purchase agreement for the Lakeville site, and like any responsible developer, we will close on the property once we complete due diligence and obtain the necessary entitlement. We are committed to transparency and integrity throughout this process.”
Meanwhile, the AGO’s lawsuit says Nolosha, and the company’s owner, are “making payments towards the property but have not paid for even a third of the sales price and there have already been four extensions to the closing date, with the latest Fourth Amendment to the Purchase agreement extending the closing date to November 10, 2024.”
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Luke Sprinkel previously worked as a Legislative Assistant at the Minnesota House of Representatives. He grew up as a Missionary Kid (MK) living in England, Thailand, Tanzania, and the Middle East. Luke graduated from Regent University in 2018.
Photo “Nolosha Development” by noloshadevelopment.com.
