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Texas Attorney General Ken Paxton has filed a lawsuit against Colony Ridge, a real estate development northeast of Houston, alleging that it engaged in deceptive trade practices and fraudulent real estate transactions.

Paxton’s lawsuit stated Colony Ridge misrepresented the property’s conditions, where the promised infrastructure features of sewer, water or electricity are missing. Buyers are unable to use the land, at which point Colony Ridge then forecloses on the buyer and repossesses the land before selling the same plots to others. The predatory practices of Colony Ridge have led to a foreclosure rate 50 times greater than the 2023 national average, the lawsuit added.

The lawsuit also cited former employees of Colony Ridge who said they were told not to sell to customers who speak English or who did not appear to be of Latino or Hispanic heritage.

“Colony Ridge’s business model is predicated on churning land purchasers through a foreclosure mill,” said the lawsuit. “Namely, Colony Ridge targets foreign born and Hispanic consumers with limited or no access to credit with promises of cheap, ready to build land and financing without proof of income.”

Paxton called attention to Colony Ridge last October in a letter to members of Congress and the Texas leadership, writing that the “development appears to be attracting and enabling illegal alien settlement in the state of Texas and distressing neighboring cities and school districts.”

Last December, the Consumer Financial Protection Bureau and the U.S. Department of Justice filed a lawsuit against Colony Ridge that accused the company of operating an illegal land sales scheme that targeted tens of thousands of Hispanic borrowers with false statements and predatory loans.