Planned development for East African immigrants in Lakeville under investigation by state Labor Department

The state Department of Labor is investigating a planned suburban housing development aimed at East African immigrants, according to an email obtained by Sahan Journal.

A tipster earlier this month alerted the state Department of Labor that 160 clients had paid $25,000 to reserve a future home in Nolosha’s planned community in Lakeville, where the company aims to build 160 housing units, a mosque, a school, restaurants, and more. But Nolosha Development does not own the 37-acre parcel, and lacks both a building license and a real estate license, according to state records.

Nolosha officials said the company is working out legal issues over the ownership of the land. And they say another state agency has already looked into allegations over the project’s deposits.

Earlier this year, an investigator with the Minnesota Attorney General’s Office interviewed Nolosha CEO and co-founder Abdiwali Abdullahi, Nolosha spokeswoman Carol Schuler said.

“He was grilled by the AG for three hours, and they couldn’t come up with anything to come back at him for,” Schuler said on Tuesday. “They asked him a lot of hard questions about everything going on, and there was nothing there. So they dropped it.”

Schuler added that Nolosha is on track to buy the Lakeville land this fall and begin development of the project. She added that all the clients who have paid reservation fees to Nolosha are aware of the status of the project and that Nolosha has refunded two people who paid reservation fees but decided they no longer wanted to live there.

“If there’s some reason that [buyers] don’t want to do it and don’t want to hang in there because it’s taken so long, they can get their money back,” Schuler said.

The Attorney General’s Office declined to comment on any interactions with Nolosha.

The parcel slated to become Nolosha-Lakeville was purchased by another buyer in May 2022 using money allegedly stolen in the Feeding Our Future child nutrition scheme, according to federal indictments . As a result, the federal government filed a notice indicating the land had pending litigation in October 2022, effectively stalling sale of and development on the land until its legal dispute related to the Feeding Our Future case was over.

Lakeville Community Development Director Tina Goodroad told Sahan Journal that Nolosha has not submitted a development proposal to the city as of this week.

“We have met twice with representatives of Nolosha but have not received any applications and no approvals have been made,” Goodroad wrote in an email to Sahan Journal.

She added that the city has no involvement in any state investigation of Nolosha and didn’t comment further.

The tipster, who asked to remain anonymous due to fear of retaliation, flagged concerns in a June 10 email to the Department of Labor.

“These families aspire to transition from renters to homeowners and are interested in purchasing homes interest-free,” the tipster wrote in an email to Anthony Thompson, an enforcement supervisor in the Department of Labor’s Construction Codes and Licensing division.

Thompson replied in a June 21 email to the tipster, stating, “I am reviewing the information you provided and have opened an investigative file.”

Thompson referred Sahan Journal’s questions about the matter to a Department of Labor spokesperson, who declined to comment on the investigation other than stating, “Nolosha Development is not a licensed residential building contractor in the state of Minnesota.”

Land under government lock

The land slated to become Nolosha was purchased for $3 million on May 24, 2022, and included contributions from defendants indicted in the Feeding Our Future fraud scheme, according to court records.

Haji Osman Salad, charged with conspiracy to commit money laundering and various money laundering and wire fraud counts, contributed $437,000 to the purchase. Haji’s indictment subjected the 37-acre plot of land to government forfeiture. Haji pleaded not guilty to the charges, and the government’s forfeiture attempt of the land is pending.

Ayan Farah Akubar, a nonprofit director charged with conspiracy to commit wire fraud and federal programs bribery, led the purchase of the land and contributed $1.5 million, according to an indictment .

The title of the plot of land belongs to Ayan’s son, Abdirahman Siraj , according to Dakota County property tax records.

On October 4, 2022, the federal government filed a notice of lis pendens on the land in response to Haji’s indictment in the Feeding Our Future case. A lis pendens is a legal document stating that there is a lawsuit affecting the title of the land, said real estate attorney Larry Wertheim. It effectively ties up the property until the lawsuit is resolved.

“It might well be that the government ends up seizing that land,” Wertheim said. “But they’re putting everyone on notice.”

Abdiwali said in an April interview with Sahan Journal that his company entered into a purchase agreement in February 2023, unaware that the land parcel had been associated with the Feeding Our Future case. One month later, federal authorities indicted Ayan, and that’s when Abdiwali said he learned of the lis pendens filed on the land.

“Our attorneys reached out to the U.S. Attorney’s Office to let them know that we have active purchase agreements on it,” Abdiwali said. “And they did their due diligence and allowed for us to have a principle agreement in place to close on the property, because we’re a good faith purchaser.”

Schuler said Nolosha is on track to complete the purchase of the land this November, and has a verbal agreement to do so from the U.S. Attorney’s Office. But the U.S. Attorney’s Office denied this.

“The government has not entered into any agreement with Nolosha Development or its CEO, Abdiwali Abdullahi,” said U.S. Attorney spokeswoman Tasha Zerna. “This land is subject to forfeiture to the government as part of ongoing criminal cases arising out of the Feeding Our Future investigation. The land cannot be sold without a formal stipulation or court authorization. The government has not entered into a formal stipulation and the court has not authorized the sale of this land.”

Abdiwali called the lis pendens development a “fiasco” for the Nolosha project, blaming it for stalling any development on the project over the past 15 months.

But Nolosha continued to collect reservation deposits from clients seeking to live in the development through that time, according to the tipster, which could spell legal trouble, Wertheim said.

While builders can sell reservations for the privilege of living in an unbuilt development — typically called lot hold agreements — this usually comes right before a project is about to break ground, Wertheim said, and “generally not for that kind of money.”

“That’s pretty out there,” Wertheim said of the $25,000 pre-reservation fee for Nolosha. “If they actually sold pre-reservation agreements with the lis pendens there, that looks really shady. Because they’ve got no ability whatsoever to acquire the property in any reasonable timeframe.”

Schuler said that Nolosha hired a lawyer to write the language in the pre-reservation contracts and reiterated that clients know what they’re getting into. She added that Nolosha is also working with architects and urban planners on the project.

Schuler emphasized that Abdiwali and his wife, Sumayya Farah, Nolosha’s co-founder and COO, come from a public health background and are new to property development.

“They were social workers from the Department of Health with MBAs, and so they’re just trying to do the best they can, and they’re working with professionals that are supposed to know what they’re doing,” Schuler said.

‘Where cultural heritage thrives’

In the April interview, Abdiwali described the idea behind the development as a “master community” to solve “social determinants of health” that too many people in East African communities experience. He got interested in the issue after working in public health.

“We saw a lot of challenges in our community,” Abdiwali said. “And we felt that creating a master plan community designed from the ground up, focused on alleviating and addressing all of the major social determinants of health, would be a wraparound framework to really help move our community forward from both a social and economic lens.”

Abdiwali said the project has been funded by private investors.

In promotional videos, Nolosha advertises itself as a premier living and recreation area for East African families. With plans to build large condominium units, restaurants and marketplaces, Nolosha promised to be a community “where cultural heritage thrives, faith flourishes, and social connections blossom.” It calls its model a way to address “social determinants of health” by promoting general wealth and community interaction.

Abdiwali says in a promotion video that many Somali families leave core cities for the suburbs in pursuit of a better life for their children, but then become isolated. A large, mixed-use development in the suburbs can provide the community aspect of the city in the comfort and affluence of the suburbs.

“We offer more than just homes, we offer a community designed by us and for us,” Abdiwali says.

The videos feature Somali American leaders, such as Minneapolis Ward 6 Council Member Jamal Osman. Jamal did not respond to messages seeking comment.

The message struck a chord with many Somali families. Nolosha developers met with about 800 potential home buyers, according to emails from the tipster to the Labor Department. The Nolosha website’s main page has a prominent link for people to pay their deposits.

Schuler said she’s met “all the people that are buying in.”

“They’re all really excited,” she said. “They want a chance to go out and live in a decent place away from the city. They just want to create a nice place for their family.”

Additional reporting by Andrew Hazzard.

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