Attorney General Keith Ellison’s office filed a lawsuit Wednesday against two home sellers who allegedly discriminated against Somali Muslim homebuyers by selling them homes at inflated costs.
The lawsuit against developers Travis Benoit and Steven Legatt and their Minnesota companies C4D, LLC and Five Properties, LLC, is similar to a separate lawsuit the attorney general’s office recently prevailed in against Minnesota developer Chad Banken.
“To exploit someone’s deeply held religious belief in order to impoverish them and leave them without a home while illegally enriching yourself is a special kind of low,” Ellison said in a written statement. “My office and I have charged and won cases like this before and we intend to do so again.”
Benoit and Legatt work together and co-own both companies being sued. The lawsuit alleges that Benoit and Legatt violated various sections of both state and federal consumer protection laws, as well as the federal Truth in Lending Act and the state Human Rights Act.
Benoit and Legatt could not be reached for comment. Both sold homes in the Twin Cities and St. Cloud areas.
Benoit and Legatt sold homes to Somali buyers using contracts for deeds, which are alternatives to conventional mortgages that typically come with fewer consumer protections. Just like Banken, they allegedly promoted their home sales as free of interest to attract Muslim homebuyers, who often avoid paying interest because of religious beliefs.
But their contracts ultimately did contain interest payments, the lawsuit alleges, as well as “thousands of dollars in various fees that have never been disclosed and appear nowhere on the contract.”
Among these fees were large down payments and balloon payments every year or at the end of the contract, which usually lasted five years. The balloon payments typically consisted of the remaining cost of the home that had not yet been paid off.
Unlike conventional mortgages, homebuyers who purchase through contracts for deed aren’t paying equity into their homes until the entire home is paid off. That means they can lose everything if the seller forecloses on them and evicts them for missing payments, leaving the entire value of their home with the seller.
Benoit and Legatt worked together as “investor sellers,” meaning they bought homes at market prices and then sold them to Muslim buyers at inflated values. The lawsuit cites one home that CFD, LLC bought in Hennepin County for $399,900 in February 2024 and then sold to a buyer the same day at $930,950 — more than twice the original price.
The buyer, whose name is not disclosed in the lawsuit, paid a $120,000 down payment, according to the lawsuit, which immediately put them underwater.
The lawsuit also cites another time Benoir and Legatt bought a home in Hennepin County in September 2022 for $247,000 and sold it that same day for $664,000, again more than twice the market price. The buyer paid a nearly $98,000 down payment.
In some cases, Benoir and Legatt lowered monthly payments for buyers who couldn’t afford higher rates. They would then require the buyers to pay annual balloon payments at the end of each year. For example, they allegedly lowered one buyer’s monthly payment to $2,000 and then required a $77,000 balloon payment at the end of each year.
The result set up homebuyers for default, the lawsuit alleges, adding that the foreclosure rate of homes sold by Benoir and Legatt is 20 times the national average.
Sahan Journal and ProPublica first identified this rising market in contract for deed sales targeting Minnesota Muslim homebuyers in a 2022 joint investigation. The story profiled homebuyer Abdinoor Igal, who bought a $727,000 Lakeville home from Banken in 2022 and paid a $73,000 down payment. Though Igal thought his contract was interest-free, it really had a 6.5 percent interest rate attached to it. This came at a time when market interest rates were 5.3 percent.
The Sahan Journal and ProPublica investigation ultimately led to contract-for-deed reforms on the state and federal level, including new state protections passed by the Legislature.The attorney general’s office alleges that Benoir and Legatt violated the state laws.
The attorney general first sued Banken in 2024, which culminated in a jury trial in June. The jury ultimately found Banken liable for violating consumer protection and human rights laws.
The attorney general’s office and Banken are currently litigating how much restitution he will have to pay the 160 homebuyers he sold to between 2019 and 2024.
