Minnesota Attorney General Sues Home Seller for Targeting East African Muslim Community

The Minnesota attorney general’s office has filed a lawsuit against a home seller accused of exploiting the East African Muslim community through questionable real estate practices. The lawsuit claims that Chadwick Banken and his six limited liability corporations violated state and federal laws, including religious discrimination statutes. Banken allegedly used contracts-for-deed to sell homes at inflated prices and on unfavorable terms to Muslim buyers.

Attorney General Keith Ellison emphasized that the case aims to warn others engaged in similar activities. “He’s not the only one, but he’s one of the worst that I’ve seen,” Ellison said. “When people can’t pay back, they’re out of their house, and they’re out of their money. I can’t think of anything more financially devastating to a family than that.” Banken has not commented on the allegations.

The lawsuit, initiated in Hennepin County district court, follows an investigation by ProPublica and the Sahan Journal in 2022. The investigation highlighted a growing market for contract-for-deed home sales in Minnesota, particularly involving the Somali community. Many in this community seek interest-free purchasing options due to religious beliefs, but buyers reported signing contracts they misunderstood and could not fulfill.

The lawsuit accuses Banken of pressuring buyers into default by using inflated home prices, unusual down payments, and significant balloon payments due at the end of short contracts. One of the impacted buyers, truck driver Abdinoor Igal, lost his home after making $170,000 in payments. Forced to send his family to Kenya, he slept in his truck for months. Upon learning about the lawsuit, Igal remarked, “It’s not something I can describe.”

Legislative efforts are underway in Minnesota to reform contract-for-deed laws. Proposed changes would outlaw practices Banken is accused of and introduce new protections for buyers. The lawsuit reveals that Banken’s companies completed hundreds of these deals over the past six years, using business names to create the appearance of commercial evictions. Contracts often lacked clear cost disclosures and required excessive payments, especially for Muslim buyers, violating federal Truth In Lending Act requirements.

Ellison underscored Banken’s predatory behavior, stating that he profited from buyers whom he claimed to help. “He’s not helping,” Ellison said. “What he’s really helping himself to is their money that they probably have mopped floors and pushed brooms for. … He’s setting people up to fail. His conduct is predatory, deceptive. And we hope to bring a stop to it.”

Ellison encourages victims of predatory contracts to contact his office for potential restitution. Despite the ongoing lawsuit, defaults and evictions continue to affect the community, leaving individuals like Igal struggling to rebuild their lives.