Minnesota AG to judge: Order Nolosha Development to refund customers $25k deposits

The Minnesota Attorney General’s Office is asking a judge to rule in its favor in a lawsuit against Nolosha Development, which is accused of collecting deposits from mostly Somali homebuyers and failing to follow through with construction plans in Lakeville.

“For over a year Defendants have refused to provide basic information relevant to their advertising, offering, and selling of homes tailor-made for the Somali community, greatly prejudicing the [Attorney General Office’s] case and delaying justice for their victims,” Assistant Attorneys General Mark Iris and Katherine Kelly wrote in a memorandum filed in court this month.

The attorney general’s request for a default judgement would put an end to the legal case, which it first filed in October 2024 after more than a year of investigating Nolosha. The office is also asking a judge to order Nolosha to stop advertising the project and to issue refunds to all of its customers, who paid deposits of up to $25,000 per home. The request includes Nolosha paying the state’s legal fees in the case.

The planned 160-unit housing development has been mired in legal trouble for more than a year. The Attorney General’s Office is suing Nolosha for consumer fraud, deceptive trade practices and false advertising.

The office alleges that Nolosha falsely advertised high-end homes throughout 2022, 2023 and 2024 for between $370,000 and $500,000 per unit. The company advertised the development to Somali customers, and said it would include a mosque, school and several restaurants.

Nolosha allegedly promised interest-free halal loans to its clients, which was appealing to Muslim clients because many view paying interest as forbidden in their religion.

“Defendants have no ability to deliver on the promise that customers would be able to obtain their homes with interest-free financing,” the attorney general’s latest motion reads.

Nolosha never owned the 37-acre parcel of land in Lakeville that it plans to develop, much less applied for or obtained building permits from the city. A purchase agreement between Nolosha and the owner of the Lakeville parcel was cancelled last December after many extended deadlines over the course of 20 months, according to the Attorney General’s filing this month.

Nevertheless, at least 160 people have paid deposits to Nolosha. They were first promised single family houses, according to the latest filing, but Nolosha later changed them to multi-unit dwellings.

The Attorney General’s Office estimates that Nolosha has collected more than $1 million from these prospective homeowners.

For most of this year, Nolosha has not had an attorney to represent it in the legal case or at court hearings. Its first attorney, David Aafedt, withdrew from representing Nolosha on New Year’s Eve 2024. Attorney Surya Saxena briefly represented Nolosha for three weeks in February, withdrawing just two days before a court-imposed deadline for Nolosha to hand over several internal documents to the Attorney General’s Office.

Nolosha has not complied with that court order, which was first issued last August and has been extended numerous times since.

“Defendants have refused to provide basic details related to how much money has been raised from customers and how many customers have requested refunds,” the attorney general’s motion reads. “Defendants have even refused to provide the basic data always produced in a consumer-protection case like a customer list and names of employees, depriving the [Attorney General’s Office] of the opportunity to depose relevant witnesses.”

Hennepin County District Judge Christian Sande scolded Nolosha’s CEO, Abdiwali Abdullahi, at a January hearing for violating the court order. Abdullahi and Nolosha did not have a lawyer at the time.

“It’s time for you to take this matter seriously,” Sande said.

Sande warned Abdullahi that continued failure to comply with court orders could lead to him issuing a default judgment, which would include striking Nolosha’s not guilty plea and ruling against it. Because Nolosha is a company, it cannot represent itself, Sande said.

But, the judge added, Abdullahi can represent himself because he is specifically named as a defendant in the lawsuit.

The Attorney General’s Office will argue its case to end the lawsuit at an April 29 hearing in Sande’s courtroom.

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This story comes to you from Sahan Journal, a nonprofit newsroom dedicated to covering Minnesota’s immigrants and communities of color. Sign up for a free newsletter to receive Sahan’s stories in your inbox.