Texas Attorney General Ken Paxton is suing the East Plano Islamic Center, an affiliated development group and others to stop a planned residential development in Collin and Hunt counties tied to the mosque, his office announced Friday.
Paxton accuses the mosque, developer Community Capital Partners LP and others of “engaging in an illegal development scheme that violated Texas securities law.”
Paxton filed the 21-page lawsuit in Collin County.
The project — once called EPIC City and now referred to as The Meadow — is a planned Muslim-centric development of more than 1,000 homes, a K-12 faith-based school, a mosque, elderly and assisted living, apartments, clinics, retail shops, a community college and sports fields on 402 acres in Collin and Hunt counties.
The site is outside of Josephine, about 40 miles northeast of downtown Dallas.
D-FW Real Estate News
“The leaders behind EPIC City have engaged in a radical plot to destroy hundreds of acres of beautiful Texas land and line their own pockets,” Paxton said in a statement. “I will relentlessly bring the full force of the law against anyone who thinks they can ignore the rules and hurt Texans. The unlawful land project known as EPIC City will be stopped, and those responsible will be barred from ever creating another fraudulent operation like this again.”
Paxton alleges that the development group engaged in fraudulent practices while soliciting funds for the project.
Individuals named in the lawsuit are Community Capital Partners president Imran Chaudhary, Naveed Siddiqui and Sarfraz Ahmad.
Both Siddiqui and Ahmad are identified as directors in Community Capital Partner in filings with the U.S. Securities and Exchange Commission. Siddiqui is listed as treasurer of the East Plano Islamic Center, according to the mosque’s website.
Paxton alleges developers “funneled a significant amount of the funds to their own pockets” and failed to verify the accredited investor status of more than 10% of people who bought securities for the project.
To reserve lots in the development, investors must buy an $80,000 share of Community Capital Partners — money that will be credited to the purchase of a home lot.
Project investors must be classified as accredited under U.S. Securities and Exchange Commission guidelines. Along with other requirements, that means they must have a net worth of over $1 million ― and an individual income of $200,000, or a household income of $300,000 over a period of time, according to documents published on the group’s website.
Investments help Community Capital Partners cover the cost of the land purchase and the development of roads.
Chaudhary did not immediately respond to questions regarding the lawsuit.
Attempts to contact Dan Cogdell, an attorney representing the EPIC mosque and the developers, were not immediately returned.
In March, Paxton issued a civil investigative demand to Community Capital Partners “to acquire material relevant to an investigation regarding potential violations of Texas consumer protection laws.”
The group provided over 750 documents along with written responses to Paxton’s office as part of the probe.