Minnesota Attorney General Keith Ellison has sued St. Cloud-linked real estate companies C4D, LLC, and Five Points Properties, LLC, along with co-owners Travis Benoit and Steven Legatt. The complaint alleges the defendants used predatory contracts for deed to target Somali Muslim buyers, discriminate based on religion and national origin, and obscure the cost and risks of the transactions, according to KNSI.
A Scheme Allegedly Dating Back to 2017
The complaint says the alleged conduct began in 2017 and continued through September 2025. It accuses the companies of omitting legally required disclosures and misleading customers about contract costs. Filed in Hennepin County District Court, the lawsuit also argues that C4D and Five Points Properties operated as a single business controlled by Benoit and Legatt, who personally signed the original mortgages and later contracts, according to KNSI.
A contract for deed allows a buyer to make payments directly to the seller, but legal ownership generally does not transfer until the contract is fully paid. The complaint alleges that C4D and Five Points Properties bought homes with conventional 30-year mortgages, then resold them the same day through contracts for deed at substantially higher prices. In one example, C4D allegedly bought a home in February 2024 for $399,900 and resold it that day for $931,950, a difference of $532,050, according to the Minnesota Attorney General's Office.
Marketing Aimed at a Community That Avoids Interest
How Contract-for-Deed Deals Can Put Buyers at Risk
The allegations fit a broader pattern identified by the Consumer Financial Protection Bureau, which says contract-for-deed loans are disproportionately concentrated in low-income, Black, Hispanic, immigrant and some religious communities. The Minnesota Attorney General's Office warns that these agreements are riskier than traditional mortgages because buyers do not receive the same borrower protections and sellers face fewer regulatory obligations.
For Minnesota buyers who have received the required disclosures, the Attorney General's Office says a purchase agreement may be canceled, with all money returned, during the five days after those disclosures are received. That guidance is separate from the allegations in the C4D lawsuit, which contends the defendants did not provide required disclosures in English or Somali.
The complaint alleges that C4D marketed primarily in Somali and presented its contracts as consistent with Islam's prohibition on interest. According to KNSI, the company's marketing included a Somali community liaison who recruited buyers and collected late payments, as well as videos featuring a local imam and Somali singer. The state contends those practices helped the company reach buyers who might have had difficulty obtaining conventional financing or sought to avoid interest-based loans.
That same liaison was later featured in company marketing even after he fell behind on his own contract, and C4D eventually took back his home, the outlet reports. The strategy reflects a broader dynamic documented by ProPublica, which reported in November 2022 that Minnesota is home to the nation's largest Somali population, estimated at roughly 80,000 residents, where homeownership has historically lagged due to credit barriers and religious prohibitions against paying or receiving interest.
Hidden Fees and Balloon Payments
The lawsuit alleges that C4D concealed interest rates and fees and used annual balloon payments in addition to regular monthly installments, including in transactions the state says were subject to federal restrictions on such structures. One buyer allegedly paid $2,000 a month while owing a $77,475 annual balloon payment; another faced a final payment of $220,000 on a $541,200 contract. Court filings also identify buyers who owed $811,050 and $567,000 on separate contracts, figures the state attributes in part to the company's markups, according to KNSI.
The state also accuses C4D of never providing legally required disclosures — in English or Somali — that would have warned buyers that missing even one payment could lead to cancellation of the contract and loss of both the home and all prior payments made. Ellison's office says the company also failed to provide independent financial counseling as required, and never checked whether buyers could actually afford the payments they were signing up for.
A Pattern of Financial Distress
The state cites signs of widespread financial distress among C4D customers. More than two-thirds of the company's roughly 74 known customers applied for COVID-era homeowner assistance through HomeHelpMN, a rate five times higher than that of customers of any other Minnesota contract-for-deed company, according to the Minnesota Attorney General's Office. The complaint also says C4D's contracts failed at a rate more than 20 times the national residential mortgage foreclosure rate. Ellison's outside co-counsel, civil rights firm Relman Colfax PLLC, argues that pattern shows the contracts were structured in ways that made default and repossession especially likely.
Relman Colfax's involvement signals how the state is framing the case around civil rights law rather than contract disputes alone. The firm's release accuses C4D of illegal reverse redlining — a violation that occurs when a lender or seller intentionally targets a racial, ethnic, or religious group with predatory or deceptive credit products, in violation of the Minnesota Human Rights Act and the federal Equal Credit Opportunity Act. The lawsuit also alleges C4D violated the federal Truth in Lending Act, and roughly 90 percent of its contracts triggered extra federal protections while about 20 percent fell into an even more heavily regulated category, per KNSI.
Warnings That Went Unheeded
The allegations weren't a surprise to everyone. An attorney representing two Somali buyers sent C4D a warning letter in August 2023 accusing the company of skipping required disclosures and targeting buyers based on religion and national origin, according to KNSI. C4D settled with two buyers out of court following complaints, but the lawsuit alleges the company never changed its disclosure practices or contract terms afterward.
The company also touted its role in helping the community buy the Islamic Center in St. Cloud — which serves as a mosque and community hub — along with a local charter school, with one marketing video declaring that “such accomplishments would not have been possible” without C4D's involvement, the outlet reports.
State Law Tightened Mid-Scheme
For years, Minnesota law required sellers who completed four or more annual residential contract-for-deed sales to provide written risk disclosures, a rule in place from 2017 through mid-2024. A sweeping overhaul authored by State Sen. Zaynab Mohamed and Rep. Hodan Hassan then expanded those disclosure requirements starting August 1, 2024, mandating that sellers disclose the true annual loan cost, the seller's purchase price, the size and timing of any balloon payment, and a 10-day cancellation window, according to Minnesota House Public Information Services.
Federal regulators moved in parallel. The Consumer Financial Protection Bureau issued an advisory opinion in August 2024 affirming that contracts for deed qualify as consumer credit under the Truth in Lending Act and Regulation Z, requiring sellers to assess whether a buyer can actually repay before signing them to a deal, according to the Consumer Financial Protection Bureau.
Judicial Precedent and a Pattern of Enforcement
Ellison's office isn't approaching this fight cold. In June, Hoodline reported on a Hennepin County jury finding Twin Cities broker Chadwick Banken liable for religious discrimination and consumer fraud in a strikingly similar contract-for-deed scheme targeting East African Muslim buyers — a verdict that established local legal precedent for exactly the theories now being used against C4D.
That case followed years of scrutiny. A 2022 investigation by ProPublica and Sahan Journal reported on how Twin Cities investors were marketing high-risk contracts for deed as interest-free financing to Somali Muslim families. Ellison himself issued a public Scam Stopper consumer alert in May 2024, warning Minnesotans that contracts for deed amount to poor man's mortgages that combine the obligations of homeownership with the disadvantages of renting, according to the Office of the Minnesota Attorney General.
What the State Is Asking For
Ellison is asking the court to halt the alleged practices, impose financial penalties and hold Benoit and Legatt personally liable. The state also seeks to cancel or modify existing contracts so affected buyers can be made whole, according to KNSI's reporting on the filing.
