Minnesota Attorney General Keith Ellison has filed a lawsuit against a land developer alleging that it “misrepresented numerous important sale details” to get Somali-American families to make $25,000 down payments for homes in a proposed Lakeville development.

The civil action, filed Wednesday in Hennepin County District Court against Nolosha Development LLC and its owner, Abdiwali Abdullahi, alleges consumer fraud, deceptive trade practices and false advertising. It aims to stop the company’s “misrepresentations” and seeks “full refunds for the hundreds of families who paid significant sums for their dream home,” according to a statement issued by the attorney general’s office.

Nolosha Development marketed the proposed development, called Nolosha Lakeville, through its website and collected more than $1 million from 160 families, according to the lawsuit. “If a customer cancels and asks for their money back, then Defendants unfairly retain between 10% and 20% of the $25,000 deposit,” the lawsuit alleges.

After the initial 160 lots were reserved, Nolosha began charging $500 for customers to be added to a waitlist. There are more than 1,500 customers on the waitlist.

The lawsuit contends Nolosha’s fraudulent representations and “falsehoods” include: single-family homes when “at best they will build multi-family housing;” that homes would be sold with no-interest payment plans; and completion in 2023 and 2024 “when in fact the company has not bought the land, obtained necessary permits, nor hired a construction company to even break ground.”

Nolosha also has no plans to build amenities such as Halal food markets, a mosque and an Islamic school they told customers would be part of the development, the lawsuit asserts.

“If you are selling a product, you need to be honest with your customers about what that product is,” Ellison said. “Promising your customers the world, taking massive upfront payments from them, then failing to deliver on those promises is fraud, plain and simple.”

Nolosha was brought to the attention of the attorney general’s office last year after complaints the company was engaging in business fraud and that Nolosha Lakeville was being falsely advertised.

The attorney general’s office said that after it opened an investigation, some of Nolosha’s customers said the developer refused to provide full or even partial refunds. When the attorney general’s office requested that Nolosha offer customers full refunds due to their alleged false representations, they refused and stopped cooperating with the investigation.

Later, a court order compelled Nolosha to turn over information related to the probe, but Nolosha refused to comply and stated it would appeal that order, the attorney general’s office said.

A call was made Wednesday to Nolosha Development seeking comment on the lawsuit, however, no one answered and its mailbox was full so a message could not be left. An email to Nolosha spokesperson Carol Schuler for comment was not returned.

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