Minnesota AG Sues Chadwick Banken for Predatory Deals Targeting Muslim Community

Minnesota’s Attorney General Keith Ellison has initiated legal action against real estate broker Chadwick Banken, accusing him of exploiting a predominantly Muslim community through manipulative contract-for-deed real estate transactions.

The lawsuit, lodged on May 14 in Hennepin County District Court, alleges that Chadwick Banken and his six affiliated limited liability corporations engaged in practices that not only inflated home prices but also imposed disproportionately harsh terms on Muslim buyers, in violation of state and federal laws, including anti-religious discrimination statutes.

Describing the transactions as “predatory and deceptive,” Ellison highlighted that while Banken is not the sole practitioner of such deals, his methods rank among the most egregious. “These deals can strip families of their homes and savings, a devastating blow by any measure,” Ellison remarked.

The issue came to light following a surge in contract-for-deed home sales within the Somali community starting in 2022.

Legal and Legislative Response on Chadwick Banken

These deals, often marketed as “interest-free” opportunities compliant with Islamic law that prohibits interest, actually obscured complex terms that many buyers did not fully understand, ultimately leading to defaults.

According to the lawsuit, Banken capitalized on these defaults to reclaim properties after buyers had made substantial financial commitments.

One victim, trucker Abdinoor Igal, shared his harrowing experience of losing his home in Lakeville after failing to meet the steep demands of the contract, which led to financial ruin and temporary homelessness. “This lawsuit brings a wave of relief,” Igal expressed, overwhelmed by the legal support.

The attorney general’s office points out that Chadwick Banken, through his LLCs such as Slow Flip LLC, targeted vulnerable buyers with poor credit histories or recent financial distress, pushing them into unfavorable deals that almost inevitably led to default.

Allegations also include deceptive practices like encouraging buyers to sign under business names to mislead courts during eviction proceedings.

Ellison’s lawsuit aims not only to hold Banken accountable but also to warn others involved in similar dealings. Additionally, he urged anyone feeling trapped in a contract-for-deed deal to seek potential restitution from his office.

This legal action coincides with increased legislative attention on contract-for-deed deals in Minnesota, a state with a high incidence of such contracts.

In response to growing concerns, bipartisan lawmakers introduced the Preserving Pathways to Homeownership Act of 2024 earlier this year, aiming to fortify legal protections for home buyers and curb exploitative practices by sellers.