A Minnesota jury found a home seller and financier liable Monday for violating state laws in a scheme that targeted East African Muslims with deceptive real estate deals marketed as sharia compliant. After a two-week trial in Hennepin County District Court, the seven-person jury determined that Chadwick Banken knowingly deceived home buyers through contract-for-deed arrangements, which are alternative financing arrangements where purchasers pay sellers directly in installments.
Banken sold 160 homes using contracts for deed, targeting Muslims and buyers with poor credit who sought interest-free financing options. Many buyers in Minnesota's Somali community say paying interest violates their Islamic religious beliefs. The attorney general's lawsuit alleged that Banken hid the amount of interest by front-loading it into abnormally high down payments, used inflated home prices, confusing paperwork and six-figure balloon payments to push buyers into default.
What the Right Is Saying
Banken's defense attorney Jack Pierce described his client as an honest businessman who only offered alternative financing to those who could not qualify for or objected to traditional mortgage avenues. For some people it did not work out, Pierce told jurors. That is too bad. It is unfortunate. That's life. Sometimes things don't work out.
Pierce argued that Banken purchased the houses his customers selected, flipped them the same day and charged a markup for profit. He said prospective buyers approached Banken rather than the reverse, and that customers' own realtors bore responsibility for referring clients to the program and explaining contract terms. Is that wrong? Pierce asked the jury. Are we going to punish somebody for providing the opportunity for someone else to buy a house in the option they wanted?
The defense maintained that Banken offered a menu of financing options, leaving it to customers to decide which arrangement suited their needs, and that his business served an unmet demand in the community.
What the Left Is Saying
Minnesota Attorney General Keith Ellison called Banken's contract-for-deed scheme one of the worst I have seen. The jury found Banken and several of his companies civilly liable for violating the Minnesota Human Rights Act, with the verdict marking a significant enforcement action under the state's anti-discrimination statutes. Assistant Attorney General Karthik Raman told jurors during opening arguments that Chad Banken exploited people's willingness to sacrifice for this dream. Another prosecutor, Mark Iris, said in closing: I'm not saying Mr. Banken wanted these transactions to fail — I am not saying that — but he sure was indifferent.
Civil rights advocates praised the outcome as a necessary check on predatory practices targeting religious minorities. The Minnesota Human Rights Act prohibits discrimination in housing transactions based on religion and national origin, and the verdict signals that exploiting someone's faith for profit carries consequences under state law.
What the Numbers Show
Banken sold 160 homes through contract-for-deed arrangements targeting Muslims and buyers with poor credit. The jury found him liable for violating the Minnesota Human Rights Act and determined he also violated the Consumer Financial Protection Act on two counts, along with the Prevention of Consumer Fraud Act and the Uniform Deceptive Trade Practices Act — the latter four verdicts are advisory, meaning a judge will make final determinations on those findings.
The court may order restitution to victims and assess penalties up to $25,000 per violation, in addition to requiring surrendering profits from the scheme. The investigation that prompted the lawsuit originated from a 2022 joint report by ProPublica and Sahan Journal that documented a rising market for contract-for-deed sales in Minnesota, particularly within the Somali community.
The Bottom Line
The verdict represents a notable enforcement action under Minnesota's fair housing laws and sets a precedent for how state authorities may pursue cases involving predatory lending targeted at religious communities. A judge will now determine whether to order restitution for victims, some of whom testified they lost life savings and homes while unknowingly violating their religious principles. The case is expected to inform future regulatory scrutiny of contract-for-deed arrangements in Minnesota and potentially other states where similar financing methods serve homebuyers who avoid traditional mortgages due to religious or credit reasons.