Minnesota jury finds Chadwick Banken liable in predatory home financing scheme
A jury has determined that Banken and his companies violated the Minnesota Human Rights Act by targeting East African Muslims with deceptive real estate deals, while other consumer protection counts remain advisory pending judicial review.
A Minnesota jury has found Chadwick Banken and his companies civilly liable for violating the Minnesota Human Rights Act in a scheme that targeted East African Muslims with deceptive real estate deals marketed as "sharia compliant". The verdict, delivered after a two-week trial in downtown Minneapolis, concludes a civil case brought by Attorney General Keith Ellison’s office following a 2022 investigation by ProPublica and the Sahan Journal.
The seven-person jury deliberated for approximately eight hours over two days before determining that Banken sold homes at inflated prices with hidden interest and onerous terms. While the Human Rights Act verdict is binding, the jury also issued advisory findings that Banken violated the Consumer Financial Protection Act on two counts, the Prevention of Consumer Fraud Act, and the Uniform Deceptive Trade Practices Act. A judge will make the final determination on these advisory counts and decide on penalties, which could include fines of up to $25,000 per violation and the surrendering of profits.
Assistant Attorney General Karthik Raman argued during opening statements that Banken exploited buyers' willingness to sacrifice for the "American dream". The state’s case alleged that Banken used complicated "contract for deed" arrangements to reap massive sums while leaving customers financially ruined. Assistant Attorney General Mark Iris told jurors during closing arguments that while he did not claim Banken wanted transactions to fail, he was "indifferent" to the outcomes.
Banken’s lawyer, Jack Pierce, defended his client as an honest businessman who offered alternative financing to those who could not qualify for traditional loans. Pierce argued that realtors were responsible for referring clients and explaining terms, and that prospective buyers approached Banken with their own options. "For some people it didn’t work out," Pierce told jurors. "And that’s too bad. It’s unfortunate. That’s life. Sometimes things don’t work out."
Victim Abdinoor Igal testified that he was told he could purchase a "no-interest" home but later discovered the cost was significantly higher than quoted, with a large portion of payments going toward hidden interest. Igal, who put down $20,000 in 2022, said he lost $170,000 in payments, became homeless, lived in his truck for a year, and had to send his children back to Africa. He sold 160 homes using these contracts, targeting Muslims and buyers with poor credit.
