Texas AG Paxton sues EPIC City developers after probe finds alleged fraud, misleading Muslim-only marketing

"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. "I will relentlessly bring the full force of the law against anyone who thinks they can ignore the rules and hurt Texans."

According to the Verified Petition, CCP sold investment interests for $40,000 to $80,000, despite failing to register the securities or qualify for federal exemptions. 

The state claims the group broadly solicited investors through meetings, social media and online promotions, which is activity not allowed under the exemptions they claimed.

Investigators also allege the developers failed to take reasonable steps to verify purchasers were accredited investors, with documentation missing or inadequate for a number of buyers.

The petition says the project was advertised as being "in the heart of Josephine, Texas," even after the city told developers in February 2025 that the land was not within its limits or utility district. Marketing materials allegedly continued to make the claim.

The state further points to alleged promotional materials that appeared to target Muslim buyers, including early website language and videos describing EPIC City as the "epicenter of Islam in North America."

Paxton's office also alleges CEO Imran Chaudhary publicly promised he would take "not a cent" in salary, but later signed a contract paying him $360,000 a year through a separate company, a compensation arrangement not disclosed in written offering materials.

Investigators allege more than $1 million in investor funds were withdrawn for general operating expenses, exceeding what offering documents described.

An unsworn declaration attached to the lawsuit verifies only portions of the investigative timeline required under state law, and the Texas securities commissioner has not made any public statements about the allegations.

Paxton first announced his investigation in March, and sought the referral in October after uncovering additional concerns.

Paxton is asking the court to halt all fundraising tied to the project, freeze assets, appoint a receiver, correct public statements and impose civil penalties of up to $20,000 per violation. The suit also seeks the return of investor funds.

EPIC City, since rebranded as "The Meadow," was marketed as a master-planned development spanning Hunt and Collin Counties. Court filings show hundreds of investors purchased units.

Fox News Digital has requested comment from EPIC, CCP and Paxton's office.