High-profile plans for a large housing development centered by a mosque in Lino Lakes are on hold well into the new year, now that a federal judge has denied developer Faraaz Mohammed’s request for an early end to the city’s moratorium that stalled his proposed project.

The developers have been squaring off with city leaders and officials in federal court over a lawsuit in which Mohammed accused them of Islamophobic discrimination.

But critics of the proposal in this Anoka County community say the racial controversy swirling around Mohammed’s Madinah Lakes housing development has clouded legitimate concerns about the developer’s past legal troubles. Those include a lawsuit alleging he lied about being a licensed contractor and a past conviction for theft by swindle.

“It has felt scammy to me from the beginning,” Lino Lakes resident Melissa Schultz said in an interview, echoing a complaint aired frequently at the many public meetings held about the project throughout 2024.

Mohammed restated his confidence in the project in an email to the Minnesota Star Tribune. He called the claims of the recent lawsuit that he settled with a client “frivolous” and said his team is “committed to working honestly, transparently and collaboratively with the City (of Lino Lakes) and its residents.”

Architect Dean Dovolis, who partnered with Mohammed on the project and is the founder of DJR Architecture, defended the developer and said the criticisms of Mohammed’s past are driven by opposition to a Muslim-focused development.

“It was what I call premeditated murder of a project because they didn’t like the idea of an Islamic community,” Dovolis said.

Mohammed’s company, Zikar Holdings, purchased the former Robinson Sod Farm in March with the intention of turning it into a large, mixed-use development that would bring in an estimated 1,200 to 1,300 homeowners. It includes more than 400 homes for sale or rent, a shopping area and the mosque.

The council voted 4-1 in June to put a moratorium on all residential development in the city’s northwest quadrant until August 2025, though that does not prohibit construction of the mosque or commercial buildings.

The city argued a moratorium was necessary to allow for time to create a new “master plan” for that area of the city. The Zikar Holdings lawsuit alleges that the moratorium was unfairly put in place because officials don’t want a project that Mohammed described as “Muslim-friendly.”

In October, Mohammed and co-plaintiffs submitted a request for an injunction in federal court to end the moratorium early. But on Dec. 26, U.S. District Judge Jeffrey M. Bryan denied the request, writing in his order that, based on their preliminary argument, the developers “are not likely to succeed” on their claim that the city of Lino Lakes violated the Fair Housing Act.

Opponents have raised concerns about Mohammed’s past since the project was introduced last spring. Amid the accusations of Islamophobia, his background became an argument for why the proposal should be denied.

Mohammed was convicted of theft by swindle in 2013 when he was handling accounting duties for a company called Forevergreen in Eden Prairie. The owner discovered that Mohammed had written 16 unauthorized checks to himself and four electronic payments, totaling roughly $20,000, according to the complaint. Mohammed took a plea deal that reduced the conviction from a felony to a misdemeanor.

Mohammed admitted to forging checks in the written guilty plea, but he said in an interview this year that he believes it was a wrongful conviction. He did not elaborate and did not respond to another inquiry this week for more details.

In October 2023, the Minnesota company Royal Priesthood LLC sued Mohammed, alleging that a company he owned was paid $62,000 to complete renovations on a Minneapolis apartment building that were never finished.

Royal Priesthood owner Olaleye Olagbaju said in an interview that Mohammed lied when he said he was a licensed contractor in Minnesota. The lawsuit alleged that Mohammed’s company never paid the money back, that only part of the work was completed on the building’s roof and that the work was done incorrectly.

In the settlement, Olagbaju was paid back $25,000 of the money he lost. Olagbaju said he finds it “worrisome” to have Mohammed leading a project as large as Madinah Lakes.

“I suggest people do their due diligence to decide if he’s someone they should trust to do a big project like that,” Olagbaju said.

His lawsuit accused Mohammed of going by a different name to “confuse, mislead, or otherwise defraud” those he does business with. Mohammed said that he began going by a different last name, Yussuf, because he struggled to find work following the theft-by-swindle conviction.

Mohammed said that the lawsuit was “frivolous and unfounded” and that his company fulfilled contract requirements.

“Lawsuits do happen in our industry, they are, in fact, so common that many attorneys dedicate their entire practice to the specialty,” Mohammed said. “We are not immune from that reality.”

Mohammed has never been licensed as a contractor in Minnesota, a frequent criticism from Madinah Lakes detractors. James Honerman, a spokesman for the Minnesota Department of Labor and Industry, said a recent theft-by-swindle conviction would “likely” make becoming a licensed contractor difficult, since applicants are required to submit a background check.

However, Mohammed is allowed to act as a developer if he contracts with licensed builders to do the work, Honerman said.

“Our role is to conceive, finance and manage the project, including hiring and supervising the general contractor and other licensed professionals who will take Madinah Lakes from an amazing vision to a stunning reality,” Mohammed said in response.

The project’s architect, Dovolis, said that about 80% of developers he’s worked with haven’t been licensed contractors.

In November, KARE 11 reported allegations that Mohammed had been involved in a scheme with a former employer to forge shipping receipts. Mohammed told the Minnesota Star Tribune that he was not responsible for what happened, saying he had inadvertently passed along false information from his employer.

Dovolis said it was important for him to meet with Mohammed to ask about the past allegations. After doing so, he said, he felt confident about the project.

“Things happened in the past. It’s life,” Dovolis said. “But he seemed very sincere about trying to pull this development together.”

Meg Sawyer, a spokeswoman for the city of Lino Lakes, said the city would not comment for this story.

David Schultz, a professor at Hamline University who previously worked as a director of planning, zoning and code enforcement for the city of Binghamton, N.Y., said a developer with a history of fraud allegations and a swindle conviction would have given him pause.

“This would come under a very, very careful consideration in terms of: ‘Is this an overall feasible project?’ ” Schultz said.

Jason Kuboushek, an attorney representing Council Member Michael Ruhland in the civil lawsuit against the city and two of its council members, was unsure if Mohammed’s past fraud allegations could affect the project’s being approved or denied. He said it would depend on whether Mohammed’s past allegations correlate to his ability to fund the project.

Dovolis, however, stressed that the only consideration should be the merits of this particular project and whether it will be funded. The architect said that he has met with investors for the project and that the funding is already in place for it.

Jaylani Hussein, the director of the Minnesota branch of the Council on American-Islamic Relations, said that the allegations against Mohammed are serious. But Hussein said he thinks the project is getting pushback only because it’s focusing on Muslim customers.

“I don’t think it would have mattered whether the developer had a past or not,” Hussein said. “I don’t think that was the reason that they were trying to stop this project.”