The lawsuit centers on claims that the project violates securities laws, specifically under the Texas Securities Act. It follows the state GOP’s persistent attempts to block the Muslim development this year, though the Justice Department struck a blow to the effort over the summer by declining to press charges. 

“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 last Friday.

 “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,” he continued. 

The attorney general claimed “certain promotional materials” for EPIC City implied that the project would be unlawfully reserved for Muslims, in violation of discrimination laws. In a press release, Paxton further alleged the developers have funneled a significant amount of funding for the project into their own pockets, “despite promising not to,” writing that for more than 10% of those who purchased securities, Community Capital Partners illegally failed to verify their status as “accredited investors.” 

The latest action from the attorney general’s office comes after Texas officials have prioritized efforts to block EPIC City, a proposed North Texas community that would span approximately 400 acres and include more than 1,000 homes, a K-12 faith-based school, a mosque, retail shops, and more. 

Republicans have raised concerns that the new city could promote Sharia law, the Islamist legal system that imposes harsh penalties on those who do not follow Muslim teachings, including targeting gay people and fining or arresting women who choose not to wear a hijab or wear it loosely.

Gov. Greg Abbott (R-TX) launched several investigations into the city in recent months, citing allegations that it could discriminate against non-Muslims in violation of the Texas Fair Housing Act, pose violations of various Texas consumer protection laws, and operate illegal funeral services.

In August and September, the governor signed several bills targeting the development that would ban so-called Sharia compounds. They would also tighten restrictions on land ownership by foreign or criminally affiliated entities, including the Council for American Islamic Relations, known as CAIR, which holds a Dallas-Fort Worth office that has condemned Abbott’s investigations into EPIC City. 

The governor signed the bills into law after the Justice Department closed an investigation into the city in June without filing charges challenging the development. 

The DOJ opened the investigation at the request of Sen. John Cornyn (R-TX), who expressed concern the Islamic community violated laws prohibiting religious discrimination and could hold consequences for non-Muslims. 

“We welcome the dropping of this investigation and hope the DOJ’s actions send a clear message to the governor and other officials in Texas that they should similarly drop their Islamophobic witch hunt targeting Muslims in that state,” CAIR National Executive Director Nihad Awad told the Associated Press in response to the DOJ dropping the inquiry. 

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Abbott’s office pledged to continue targeting the city. 

“Texas will continue to defend our communities from any threats posed by EPIC City or other entities seeking to create a discriminatory or illegal compound, and we will continue to monitor this proposed development for compliance with all Texas laws,” a spokesperson for the governor said at the time.