Texas Attorney General Ken Paxton has filed a lawsuit targeting a proposed Muslim-focused residential community in North Texas, accusing developers of an "illegal development scheme" that violated state securities laws. 

The 21-page complaint, filed Dec. 5 in Collin County, names the East Plano Islamic Center (EPIC), its affiliate Community Capital Partners (CCP), and several leaders involved with the targeted development, once known as EPIC City and now called The Meadow. Spanning over 400 acres in Collin and Hunt counties, plans for The Meadow include over 1,000 homes, a K-12 faith-based school, a mosque, elderly and assisted living facilities, apartments, clinics, retail shops, a community college, and sports fields, envisioned as a supportive enclave for Muslim families.

Paxton's office alleges that CCP, created by EPIC to purchase and develop the land, solicited funds through fraudulent practices in violation of Texas securities laws. To reserve lots, investors were required to buy $80,000 shares in CCP, with the money credited toward future home purchases — a structure Paxton claims constitutes unregistered securities.

The suit further charges that promotional materials implied the community would be reserved exclusively for Muslims and described it as the "epicenter of Islam in North America."

Developers are also accused of diverting significant funds to their own pockets despite promises not to and failing to verify "accredited investor" status for more than 10% of buyers, as required by federal guidelines. Accredited investors must meet thresholds, such as a net worth of more than $1 million or an annual income of at least $200,000 for individuals or $300,000 for households.

“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,” said Paxton. “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.”

The civil suit seeks to permanently block the project and prevent those involved from pursuing similar ventures.

The lawsuit follows an investigation announced by the Texas State Securities Board (TSSB) in March into alleged violations of federal and state regulations involving the project. The TSSB investigation later determined sales of limited partnership interests in the former EPIC City project “did not constitute securities under the purview of the Texas Securities Act, despite being treated and marketed as such to investors.”

Despite claims that the agency provided this information to Paxton’s office, officials with TSSB claim Paxton’s office — “without prior notice or discussion” with TSSB — released a statement in October in which Paxton claimed the EPIC City project developers “undeniably violated the law and urged the TSSB to immediately review their findings and corresponding evidence and refer the matter to the Attorney General for further legal action.”

The agency later refuted Paxton’s characterization of CCP's limited partnership interests, adding it "did not constitute securities under the purview of the Texas Securities Act," despite being marketed in a manner similar to investor marketing.

"Given the evidence available to date, the sales of limited partnership interests did not constitute securities under the purview of the Texas Securities Act," the TSSB stated Monday. "This information was provided to the Office of the Attorney General prior to the Attorney General’s filing. The Securities Commissioner also advised the Office of the Attorney General that claims may be more sustainable under the Texas Deceptive Trade Practices Act."

The legal back-and-forth comes amid a rebrand of the proposed development last month, when developers with CCP submitted a formal name change for the project, now called The Meadow. 

In addition to the name change, CCP's original EPIC City website, once touting a "vibrant and inclusive community that serves the evolving needs of the Muslim community" and a "safe and purpose-built environment that fosters growth, connection, and prosperity for all who call EPIC City home," now displays only a message reading, "New website coming soon!" alongside an email address.

News Source : https://www.christianpost.com/news/texas-ag-securities-board-offer-conflicting-takes-on-epic-suit.html