Developers behind a suburban housing project under investigation have made little progress acquiring land and building homes despite collecting millions of dollars from East African community members, court documents show.
The details were revealed in an April deposition filed in court transcribing excerpts of an interview between investigators and Nolosha CEO Abdiwali Abdullahi. The documents indicate that Nolosha must clear several hurdles before it can buy a 37-acre plot of land and start construction, and that the owners have haphazardly collected salaries from a cash reserve of payments made by prospective homeowners.
The $25,000 payments agreed to by 160 prospective homebuyers do not guarantee a residence in the proposed development, but rather, a pre-reservation to be at the front of the line should the project be built, according to Abdiwali’s statements in the deposition.
“The unit reservation agreement gives you the opportunity to accept a future opportunity to purchase a home,” Abdiwali said.
Nolosha — a proposed mixed-use development in Lakeville that would cater to the Muslim community — is being investigated by the Minnesota Attorney General’s Office for collecting money for the project without a real estate license. Federal authorities are also conducting a separate investigation into Nolosha, which would feature condominium units, a school, a mosque and businesses.
While the deposition offers a peek into Nolosha’s operations, the Attorney General’s Office filed a motion in court asking a judge to compel the company to release more information. Both sides are expected to make oral arguments about the issue at an August 22 hearing.
The deposition shows that Abdiwali accused the Attorney General’s Office of harassing his company and clients, and argued that its investigation caused customers to demand refunds. The company had less than $1 million in the bank in April, according to court documents, and had yet to identify loans or investment sources needed to complete a $3.4 million purchase agreement due November 5.
“It dropped because as soon as you guys started investigating us and harassing our clients, we’ve been making refunds and we haven’t even been collecting actual — we haven’t even been able to bring in customers because we have been dealing with this harrassment,” Abdiwali told assistant attorney general Mark Iris.
Nolosha contends that the state’s investigation is based on inflated accounts from a disgruntled former employee, and is unwarranted. The Attorney General’s Office began investigating Nolosha in late 2023.
The federal government has a hold on the land because it was purchased with money allegedly stolen in the Feeding Our Future fraud scheme. The government’s hold, known as a notice of lis pendens, was placed in the fall of 2022. Nolosha entered a purchase agreement for the site in April 2023, and said it was unaware of the property’s status.
Nolosha spokesperson Carol Schuler previously said the company has a verbal agreement in place with the U.S. Attorney’s Office to release the land for sale. But Tasha Zerna, a spokesperson for the U.S. Attorney’s Office, refuted that claim in a June 27 statement to Sahan Journal, and said the land is still subject to forfeiture.
Schuler declined to comment; Abdiwali and Nolosha’s attorney did not respond to requests for comment Thursday.
Fluctuating salary
The Attorney General’s motion criticizes Nolosha for operating without a real estate license and accepting “pre-reservations” from 160 families. The development aims to offer a place where Somali American families can thrive.
The pre-reservations do not promise customers a home, and are not down payments, according to Abdiwali’s statements in the deposition and copies of pre-reservation agreements reviewed by Sahan Journal.
Abdiwali told state investigators that the pre-reservation money is Nolosha’s only income stream. He collects a salary from Nolosha, which is inconsistent and can fluctuate between $2,000 and $4,000 per month, according to the deposition.
“It really just depends on my needs,” Abdiwali said of his salary.
He told investigators the company had not pursued loans and that there was no clear path to reaching the $3.4 million needed to purchase the land in November.
Yet at the same time, Abdiwali expressed confidence in the project’s popularity.
“We have a thousand people on our wait list,” Abdiwali said in his deposition. “If someone asks for a refund, we provide it and we replace them with another customer.”
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The Attorney General’s motion says at least four people have requested refunds on their pre-reservation agreements. Schuler told Sahan Journal in June that two clients have requested and received refunds. The pre-reservation agreements say clients can receive 80% of their money back upon request.
But during his deposition, Abdiwali said that he was planning to give a client contacted by the Attorney General’s Office a full refund.
“You guys contacted her,” he told Iris. “She’s going to feel anxious, she’s going to feel worried, she’s going to feel skeptical about the project, so I think it makes sense to provide her an exception.”
Abdiwali added that moving forward, he would give full refunds to other clients contacted by the Attorney General’s Office who request refunds.
An email sent to Iris the following day from Nolosha attorney David Aefedt apparently recanted this position, clarifying that Nolosha would consider future refund requests from clients “consistent with the terms of each individual’s pre-reservation agreement” and “on a case-by-case basis.”
Abdiwali told investigators the project will be ready to move forward when it receives entitlements from the city of Lakeville. Nolosha has not submitted any applications as of July 11, according to Lakeville Community Development Director Tina Goodroad.
Conflict over whistleblower
A former Nolosha employee who spoke to state officials for the investigation accused the company of harassment after fake social media accounts impersonated him and made inflammatory statements.
Carver County prosecutors charged Abdiwali’s sister, Hamdi Elayas Abdullahi, 21, in March with felony harassment against the whistleblower.
Hamdi allegedly created fake social media accounts impersonating the former employee and posted antisemitic, homophobic and sexist comments, according to a criminal complaint. The Carver County Sheriff’s Office tracked those accounts to an internet protocol address at Hamdi’s Eden Prairie home, and alleged that she admitted to creating the accounts.
Hamdi’s attorney did not return a call seeking comment Thursday. She is scheduled to make her first court appearance on July 12.
Abdiwali told state investigators that the former employee has been defaming the company and telling people in the Somali community that Nolosha is a ponzi scheme. The former employee worked with Nolosha in 2023, and contacted the Attorney General’s Office in September 2023.
Additional reporting by Joey Peters.
