Minnesota attorney general says Somali Muslims have been defrauded by housing scheme claiming to be sharia-compliant

Muslim Somali homebuyers in the Minneapolis area have been defrauded by a “predatory” housing scheme that claims to be sharia-compliant, according to state prosecutors.

The Minnesota Attorney General’s Office filed a civil complaint last week accusing real estate brokers Travis Benoit and Steven Legatt of preying upon Somali Muslims by deceptively advertising that customers can purchase property without having to pay interest or any late fees.

Islamic law generally forbids practicing Muslims from paying additional borrowing fees or financial penalties for being late on debt repayment.

State officials alleged that Benoit and Legatt “targeted Minnesota’s Somali Muslim community” using “highly abusive” land contracts that levy hidden fees by upcharging Somali clients on loans and tacking on past due charges for missed payments.

Land contracts, known as contracts for deed, are unique property-acquisition arrangements in which buyers, typically those with compromised credit scores who cannot qualify for a traditional bank mortgage, pay the sellers directly in installments.

An 84-page filing in the case out of Hennepin County says the defendants’ companies, C4D LLC and Five Point Properties, presented the land contracts as “a trusted alternative for the Muslim community” that offers interest-free financing. Credit history was not needed, nor were credit checks ever conducted.

According to court documents, C4D’s marketing materials featured a local imam and a Somali celebrity endorsing the deed-contracting services.

In a promotional video posted on their company website, a popular Somali singer insisted that “there is no interest whatsoever” tied to the contracts.

Speaking in Somali, the company spokesperson said the contracts’ lack of interest rates had been verified by Muslim scholars and operate “in compliance with Islamic principles, providing a sharia-compliant alternative for homeownership.” 

The website also allegedly included purported images of happy Somali customers as well as video testimonials exclusively spoken in Somali.

CD4’s website allegedly featured images of Somali homebuyers happy with their purchase. (Minnesota Attorney General’s Office)

C4D had hired Somali workers to serve as community liaisons and allegedly lure fellow Muslims into entering a land contract. Authorities say the defendants, for several years, relied on a third-party company that referred Somali clients to C4D. According to the charging documents, the referral company’s owner and sole employee is a Muslim of Somali origin who was also C4D’s first customer.

State officials are arguing that C4D both misrepresented and failed to fully disclose the contracts’ conditions to unsuspecting Somali clients “often unaware of or unclear about their obligations,” until they cannot keep up with the required payments, resulting in their eviction.

“The C4D Defendants make no meaningful attempt to ensure that their customers understand the terms of the contracts for deed and do not thoroughly explain contract terms,” the charging statements allege.

Specifically, the defendants are facing consumer fraud charges and nondisclosure allegations under the federal Truth in Lending Act for failing to routinely explain the terms of each contract in Somali.

FEEDING OUR FUTURE MASTERMIND SAYS SOMALI ACCOMPLICES SCAMMED HER

However, the initial consultation calls were often conducted in Somali by a Somali-speaking community liaison, and these Somali associates occasionally participated in negotiations to provide interpretation services but not in “a thorough or systemic way,” prosecutors contend.

“Nor do Mr. Benoit or Mr. Legatt provide the contracts for deed or any written terms in Somali,” the charges read. “Instead, the C4D Defendants provide contracts and terms exclusively in English, which a high percentage of C4D customers do not fluently read or understand.”

Benoit and Legatt are also accused of violating a Minnesota law expressly designed to protect the Somali community from predatory lending. In 2024, Minnesota state Rep. Hodan Hassan and state Sen. Zaynab Mohamed introduced legislation that expanded the contract-for-deed disclosure requirements in order to prevent lenders from “taking advantage” of Somali immigrants.

“It could be my mother. It could be my sister,” said Hassan. “Those people are from my community, and some of them are vulnerable because they don’t understand the system and they don’t speak the language.”

CD4 allegedly touted happy Somali customers who entered into land contracts with the company. (Minnesota Attorney General’s Office)

In the C4D case, state officials claim that the alleged housing scheme perpetuates 20th-century unfair housing practices that racially discriminated against black homeowners through above-market sale prices, denying them the same opportunities as white Americans to accumulate equity.

Prosecutors assert that C4D is committing “reverse redlining.” As opposed to regular redlining, which is the illegal practice of refusing to offer a line of credit based on an applicant’s protected characteristics, reverse redlining pushes high-risk loans onto certain borrowers that creditors believe would struggle to pay in full and on time.

“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,” Minnesota Attorney General Keith Ellison said in a statement announcing the state’s lawsuit.

“I intend to prove in court that the fraudsters I’ve charged today have brazenly broken these laws of ours over and over,” Ellison said. “My office and I have charged and won cases like this before and we intend to do so again.”

Ellison, the state’s chief regulator of charities, has himself been accused of failing to stop the Feeding Our Future fraudsters. Feeding Our Future, a nonprofit organization in Minnesota, led a sprawling COVID-19 nutrition racket involving mostly Somali immigrants operating fake food distribution sites. The plot, costing the federal government more than $250 million in child nutrition funds, became the largest-known scam to steal from pandemic relief funding.

In December 2021, a month before the FBI launched large-scale raids on Feeding Our Future’s meal distributors, Ellison admittedly met in his capacity as Minnesota’s attorney general with a group of Feeding Our Future associates, including now-convicted fraudsters.

According to a recording of their taped conversation, consultants for Feeding Our Future told Ellison that East African business owners in Minnesota have been facing heightened scrutiny from oversight officials, blaming perceived “racist, xenophobic, [and] Islamophobic” attitudes within the state government.

Ellison agreed that state regulators were discriminating against East African businesses.

One of the Feeding Our Future business partners then stated that they would donate to officeholders who would “protect communities of color” in the business sector.

“We are willing to put our money where our mouths are, in that sense, helping elected officials that are interested in protecting communities of color specifically and creating a business atmosphere that’s fair and equal,” the associate said, “not one where we are targeted arbitrarily and preciously by different departments because of the origin of our nation and our religion.”

They eventually suggested that community members would send campaign cash to Ellison, who was seeking reelection in 2022, in exchange for him stepping in on behalf of “targeted” businesses that were fending off inquiries from investigators.

HOW MINNESOTA ATTORNEY GENERAL KEITH ELLISON IS EMBROILED IN THE FEEDING OUR FUTURE SCANDAL

“Of course, I’m here to help,” Ellison assured, adding, “Let’s go fight these people.” However, he clarified that he was not doing so to help his campaign.

Nine days after the meeting, Ellison received a total of $10,000 from four Feeding Our Future associates, though he later returned all payments, though only after the recording became public.

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