Attorney General Ellison files fraud lawsuit to protect Somali immigrant families

Ellison sues property development company in response to reports of fraud from the public

October 2, 2024 (SAINT PAUL) – Today, Minnesota Attorney General Keith Ellison filed a lawsuit in Hennepin County against a Minnesota property development company that is soliciting down payments from Somali families looking to buy a home.  The lawsuit alleges that Nolosha Development, LLC, misrepresented numerous important sale details in order to get consumers to agree to pay its required $25,000 down payments.

Nolosha’s alleged fraudulent representations include the following claims:

  1. That Nolosha would build customers large single family homes when only multi-family buildings will be offered;
  2. That Nolosha would sell the homes with no-interest 20-year payment plans with affordable monthly payments when the company will not do so and its customers will need to either pay cash or obtain a loan to buy the home;
  3. That Nolosha would finish building some of the homes by November 2023 and additional homes by May 2024 when in fact the company has not bought the land, obtained necessary permits, nor hired a construction company to even break ground; and
  4. That Nolosha’s customers would be able to walk from their new homes to numerous amenities desirable, but hard to find, by some in the Somali-American community like Halal food markets, a mosque, and an Islamic school, when in fact there will not be such amenities when the homes are move-in ready.

The lawsuit seeks to stop the company’s misrepresentations and seeks full refunds for the hundreds of families who paid significant sums for their dream home. The action comes on the heels of the Office’s recent motion to compel the company to cooperate with its investigation.

“If you are selling a product, you need to be honest with your customers about what that product is,” said Attorney General Ellison. “Promising your customers the world, taking massive upfront payments from them, then failing to deliver on those promises is fraud, plain and simple. After numerous complaints to my Office, we discovered a pattern of fraudulent behavior on the part of Nolosha and we are taking action to bring it to an end.”

Nolosha was brought to the attention of the Minnesota Attorney General’s Office in 2023 after the Office received numerous complaints from the public that Nolosha was engaging in business fraud and that Nolosha Lakeville was being falsely advertised. In the course of the Attorney General’s investigation, some of Nolosha’s customers told the Attorney General’s Office that Nolosha was refusing to provide full or even partial refunds. When the AGO requested that Nolosha offer their customers full refunds due to their false representations, they refused and stopped cooperating with the investigation.

After the AGO obtained a court order compelling Nolosha to turn over information, Nolosha continued to refuse to comply and stated that it would appeal that order. In order to avoid a lengthy appeal delay, the Attorney General filed this lawsuit to protect the public and obtain speedy refunds for Nolosha’s customers who feel that the project was misrepresented to them.

Members of the public who would like to report fraudulent activity are encouraged to file a complaint with the Attorney General’s Office using this online form. The Office can also be reached by calling (651) 296-3353 (Metro area) or (800) 657-3787 (Greater Minnesota).