Attorney General Keith Ellison announced Wednesday that his office has filed a civil lawsuit against Minnesota developers Travis Benoit and Steven Legatt, along with their companies C4D, LLC and Five Properties, LLC. The suit alleges the pair targeted Somali Muslim homebuyers with contract‑for‑deed arrangements that inflated purchase prices, concealed interest, and imposed undisclosed fees.
Alleged scheme
According to the complaint, Benoit and Legatt marketed the contracts as “interest‑free” to appeal to buyers who avoid interest for religious reasons. In reality, the contracts included interest charges and “thousands of dollars in various fees” that do not appear on the paperwork. The fees included large down payments, annual balloon payments, and other charges that left buyers underwater from day one.
One example cited in the filing shows C4D, LLC purchasing a home in Hennepin County for $399,900 in February 2024 and reselling it the same day for $930,950 – more than double the purchase price. The buyer made a $120,000 down payment, immediately creating negative equity. A second transaction involved a September 2022 purchase for $247,000 that was flipped for $664,000, with a nearly $98,000 down payment.
Risk to buyers
Contract‑for‑deed deals differ from conventional mortgages because buyers do not build equity until the entire purchase price is paid. If the seller forecloses, the buyer can lose the home and all payments made. The complaint alleges that the foreclosure rate on homes sold by Benoit and Legatt is twenty times the national average.
Ellison called the alleged conduct “a special kind of low,” saying the developers exploited deeply held religious beliefs to enrich themselves while leaving families without homes. He noted that his office has previously won similar cases, including a successful suit against developer Chad Banken that resulted in a jury finding violations of consumer‑protection and human‑rights laws.The lawsuit also references earlier investigative reporting by Sahan Journal and ProPublica, which first highlighted the rise of contract‑for‑deed sales targeting Minnesota’s Muslim community in 2022. That reporting helped spur state and federal reforms to strengthen consumer protections for such transactions.
Legal basis
The complaint cites violations of both state and federal consumer‑protection statutes, the federal Truth in Lending Act, and Minnesota’s Human Rights Act. It alleges that the developers’ practices constitute deceptive and discriminatory conduct that specifically targeted a protected religious group.
Benoit and Legatt could not be reached for comment. The lawsuit seeks injunctive relief to stop the alleged practices, restitution for affected homebuyers, and civil penalties.
Broader context
This action underscores the Minnesota Attorney General’s ongoing focus on protecting vulnerable homebuyers from predatory financing schemes. It also reflects a broader national conversation about contract‑for‑deed arrangements, which have drawn scrutiny for offering fewer consumer safeguards than traditional mortgages.
Community leaders and faith‑based organizations have expressed concern that the alleged scheme preys on families seeking to honor their religious convictions while achieving the American dream of homeownership. The AG’s office says it will continue to enforce state laws that safeguard both consumers and the principles of religious liberty.
Original reporting: Sahan Journal — read the source article.
