AG Sues St. Cloud-Linked Company Over Predatory Contracts Targeting Somali Muslims

(KNSI) — Minnesota Attorney General Keith Ellison is suing C4D, LLC, Five Points Properties, LLC, and co-owners Travis Benoit and Steven Legatt, alleging the group ran a years-long scheme that used predatory home-sale contracts to target members of Minnesota’s Somali Muslim community, including buyers with connections to St. Cloud.

The lawsuit, filed in Hennepin County District Court, accuses the defendants of discriminating against buyers based on religion and national origin, misleading customers about the true cost of their contracts, and skipping legally required disclosures. Ellison’s office says the conduct dates back to at least 2017 and continued into September 2025.

According to the complaint, C4D and Five Points Properties bought homes using conventional 30-year mortgages, then resold those same homes the same day, often within minutes or hours, to buyers through what’s known as a contract for deed. Under that kind of deal, the buyer pays the seller directly over time instead of going through a bank, and doesn’t legally own the home until the contract is fully paid off. C4D marked the homes up sharply before reselling them, and Benoit and Legatt personally signed both the original mortgages and the resulting contracts, according to the filing.

In one example cited in the complaint, C4D bought a home in Hennepin County for $399,900 in February 2024 and resold it that same day for $931,950, a profit of $532,050 on a single sale. The buyer put down $120,000 but still owed $811,050, more than double what C4D paid for the home.

In a second example, C4D bought a home for $247,000 in September 2022 and resold it the same day for $664,000, a $417,000 profit. The buyer’s $97,780 down payment left them owing $567,000 on a home the company purchased for less than half that.

The complaint says the company also relied on annual balloon payments, lump sums sometimes worth tens of thousands of dollars, on top of buyers’ regular monthly payments, to make the contracts look more affordable than they really were. One buyer with a $2,000 monthly payment owed a $77,475 balloon payment every year. Another owed a $220,000 final payment on a contract that totaled $541,200, on a home C4D bought for just $295,000.

Ellison’s office says C4D’s own data shows its contracts fail at a rate more than 20 times the national foreclosure rate. More than two-thirds of the company’s roughly 74 known customers applied for COVID-era homeowner assistance through the HomeHelpMN program, five times more than customers of any other contract for deed company in the state.

The complaint alleges C4D skipped required warnings and paperwork under both state and federal law.

Under Minnesota law in effect from 2017 to mid-2024, sellers who completed four or more residential contract for deed sales in a year had to give buyers a written disclosure spelling out the risks, including that missing one payment could let the seller cancel the contract and the buyer could lose the home along with everything they already paid. Ellison’s office says C4D never provided that disclosure.

A 2024 state law overhaul, passed after lawmakers heard reports of predatory contract for deed schemes targeting the Somali community, expanded those requirements starting August 1st, 2024. Sellers now have to disclose the true annual cost of the loan, what they themselves paid for the property, the size and timing of any balloon payments, and give buyers a ten-day window to back out before signing. The complaint alleges C4D didn’t update its practices and never gave buyers any of these disclosures, in English or Somali, despite advertising almost entirely in Somali.

On the federal side, the complaint alleges C4D broke the Truth in Lending Act, which is a federal law meant to make sure borrowers understand the true cost of credit, by never checking whether buyers could actually afford the payments, hiding the real interest rate and fees, and using balloon payments on expensive loans where federal law specifically bans them. Roughly 90% of C4D’s contracts counted as expensive enough to trigger extra federal protections, and about 20% fell into an even more heavily regulated category, where sellers are required to make sure the buyer got independent financial counseling before signing. C4D allegedly skipped that requirement too.

The complaint leans heavily on C4D’s own marketing. Its website loaded in Somali by default, featured testimonials only from customers who appeared to be of Somali origin, and included promotional videos from a local imam and a Somali singer claiming the contracts followed Islamic law’s ban on interest.

Those same videos, according to the complaint, credited C4D with helping the community buy two properties in St. Cloud: the Islamic Center in St. Cloud, described as serving as both a mosque and a community hub, and a local charter school. One video states that without C4D’s contract for deed model, “such accomplishments would not have been possible.”

The complaint also describes C4D hiring a community liaison, who was Muslim and of Somali national origin and reportedly the company’s first customer, to bring in new buyers and collect late payments, including showing up at people’s homes to ask for money. That same liaison was later featured in C4D’s marketing as a success story, even after he fell behind on his own contract and the company took the home back.

The filing also alleges C4D was warned as early as August 2023, when an attorney representing two Somali buyers sent a letter accusing the company of skipping required disclosures and targeting buyers based on religion and national origin. C4D settled with those buyers out of court but didn’t change its disclosure practices or contract terms afterward.

Ellison is asking the court to stop the company from continuing these practices, impose financial penalties, and cancel or rework existing contracts so affected buyers can be made whole. The lawsuit also argues C4D, LLC and Five Points Properties are really just the same operation run by Benoit and Legatt, so the two men should be held personally responsible, not just their companies.

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