Saturday August 24, 2024
By Erin Adler and Jeff Day
Minnesota Attorney General Keith Ellison has his office investigating a proposed real estate development by Nolosha LLC aimed at Minnesota's Somali community in Lakeville. (Alex Kormann)
The rift between the Minnesota Attorney General’s Office and a housing developer who says he is trying to build a new kind of community for Somali-American families in Lakeville was on display this week in court as lawyers traded accusations of harassment, manipulation and deceit.
Dozens of members of the state’s Somali-American community filled every seat in the courtroom and spilled out into the hallway during the hearing in Hennepin County District Court on Thursday afternoon.
“I understand the disagreements between the parties and tensions are running high,” Judge Christian Sande said.
At issue is a 37-acre proposed development by Nolosha Development LLC near the intersection of Kenwood Trail and Interstate 35. Company CEO Abdiwali Abdullahi says the development will be “the first community built from the ground up with a focus on public health and community wealth-building” for East African customers.
Sande ruled that Nolosha has 14 days to provide documents to the Attorney General’s Office that the company had previously withheld. The office had requested all Nolosha marketing materials, copies of customer contracts and a list of everyone who has requested a refund and how much they received.
“This isn’t a voluntary investigation,” Assistant Attorney General Mark Iris said in court. “We don’t get to take their word for it. We are obliged to be given business documents.”
Sande also granted Nolosha’s request for a partial protection order against the Attorney General’s Office, saying the investigation had veered outside the alleged violations. The order limits the state to inquiries related to whether the company may have violated Minnesota laws related to consumer fraud and deceptive trade practices, though the state can continue contacting Nolosha clients.
Attorney David Aafedt, who represented Nolosha, said phone calls from the Attorney General’s Office have intimidated Nolosha customers.
“It’s scary; it’s overwhelming, and it’s all-consuming,” he said.
A whistleblower, whom Nolosha says was a disgruntled employee, led the Attorney General’s Office to start an investigation in 2023 into whether the company “may be engaging in deceptive sales practices in violation of Minnesota law.”
Customers paid all or part of a $25,000 “pre-reservation” to ensure a spot in the development. The Attorney General’s Office alleges that Abdullahi has collected more than $1 million but may have lied to customers about several elements of the development.
Those elements include: owning the land when Nolosha does not; telling customers they could get partial refunds but not providing them; offering to sell homes with no-interest financing though this hasn’t been arranged; and advertising single-family homes, which Abdullahi now says won’t be built.
Abdullahi acknowledges he has never developed housing before, but in court Aafedt provided a lengthy list of professional consultants and companies that Nolosha has hired to complete the project.
Abdullahi, who has a background in public health, said the development will include a mosque, community center and commercial spaces, as well as townhomes, condos and detached houses.
Aafedt pushed back on the notion that any of this was improper. He said Nolosha had a waitlist of 1,505 people and that presentations about the development were held 1-on-1 or in small groups.
Problematic accusations?
Much of the hearing focused on the tension between the government and Nolosha, leading Sande to suggest he might appoint a special master to mediate.
Aafedt alleged the Attorney General’s Office illegally procured a client list from the whistleblower and is badgering Nolosha clients to testify.
“This is problematic on so many levels, but the state seems to have no problem with it,” he said. “The state is literally trying to gin up complaints from a stolen customer list.”
Iris alleged that Nolosha and Abdullahi are interfering with his office’s investigation. He pointed to a former Nolosha client who agreed to be interviewed but then wanted to withdraw the complaint after being contacted by Abdullahi.
“It’s highly suspicious that he is contacting our witnesses and getting them to back out,” Iris said. “There’s possible witness tampering going on with these conversations.”
Aafedt, rebutting that claim, said, “They’re our customers first, not their witnesses.”
Iris told the court that the Attorney General’s Office is not alleging any fraud; it was merely requesting documents from Nolosha, he said. Sande took issue with that based on the course of the investigation, saying it went “beyond requesting records.”
Aafedt said Abdullahi had been subjected to offensive questioning by the Attorney General’s Office during a deposition.
Court documents show Iris asking Abdullahi, “Are any of your employees pedophiles?” To which, Aafedt replied, “Oh, Jesus. Objection.”
When Iris tried to argue in court that the questions were taken out of context, Sande disagreed.
“Practice law however you want, but the issue still is that when one asks loaded questions like that, particularly with the authority of the Attorney General’s Office, you can see why Mr. Affedt would jump out of his chair,” Sande said.
Besides the legal wrangling, in the midst of the investigation, Abdullahi’s sister, Hamdi Abdullahi, was charged with a felony, accused of impersonating the whistleblower on social media and making antisemitic and homophobic remarks online.
Development in limbo
While the two parties continue to battle in court, the status of the development project remains preliminary.
Nolosha hasn’t formally submitted its plans to the city of Lakeville for approval, let alone begun construction. Company spokeswoman, Carol Schuler, said Nolosha submitted sketch plans to city officials in early August and has met with them multiple times.
“A sketch plan review is an informal review conducted internally with staff,” Tina Goodroad, Lakeville’s community development director, said when asked about what Nolosha submitted. “Plans are so preliminary at this point, therefore comments are very general.”
The Attorney General’s Office contends that Nolosha doesn’t own the development’s proposed site but offered to buy the land for $4 million in April 2023. Four extensions to the closing date have since been granted, the latest setting that date for Nov. 10 and the price at $3.4 million.
Aafedt said in court that Nolosha has a purchase agreement for the property.
Confusing things is the fact that the U.S. Attorney’s Office said the land cannot be sold without a formal stipulation or court authorization because it is caught up in the federal fraud investigation into the Feeding Our Future pandemic-era free meal program.
The U.S. Attorney’s Office said it does not have a current agreement with Abdullahi or Nolosha Development. No connection has been drawn between Abdullahi and Feeding Our Future.