Alleged Fraud Scheme Uncovered in Frisco

Real estate’s version of “if it bleeds, it leads” usually includes some version of the phrase “fraud scheme.”

DFW real estate’s latest 15-car pileup on I-35 is the case of two Frisco entrepreneurs who already had a go-round with allegations of a “Ponzi scheme” on their track record before concocting promotional materials for a luxury waterfront development on the San Gabriel River that they never intended to build, the Dallas Morning News reported.

Promotional materials for the 400-acre development showed a mixed-use development with office retail, restaurants, parks and a canal big enough for boats on the Central Texas river that “slows to a trickle” in the summer, the outlet quoted a Dripping Springs attorney as saying.

A Williamson County jury found Gopala Krishnan and Sakthivel Gounder liable for breach of contract and fraud. They were ordered to pay $400 million in damages to Energy Commissioning Inc., the Georgetown-based company they hired to do $21 million of infrastructure work for their fake development.

The outlet reported that the pair swindled Energy Commissioning owner Marshall Hussein out of so much money that he lost his home. The hefty penalty includes $300 million in punitive damages, which are awarded for particularly egregious behavior.

It’s not their first rodeo when it comes to allegations of fraud; the SEC hit Krishnan and Gounder with a temporary restraining order and asset freeze in 2023 to halt an alleged Ponzi scheme, for which the pair was accused of defrauding numerous members of DFW’s Indian-American community of $130 million. Neither faced criminal charges. They were ordered to pay back a total of $5.6 million.

Multifamily development is back in North Texas

Dallas-Fort Worth’s multifamily market is still burning through a historic deluge of new supply, but developers are already ready to start digging. This week, two new projects were announced, and two other developers announced they’ve secured financing for new apartment projects.

Oldham Goodwin Group is partnering with Fort Worth Housing Solutions to build a $71 million, 296-unit affordable housing project just north of the Fort Worth Stockyards. The project comes as the $1 billion second phase of Majestic Realty’s Stockyards redevelopment project remains ensnared in a legal battle involving former Majestic exec and Stockyards visionary Craig Cavileer.

S2 alum Blake Poston, who launched Cover2 Capital, is getting in on the Uptown Dallas action with a $100 million apartment project just south of Highland Park. The former SMU football player plans for The Savannah to feature intentionally large units, up to 1,800 square feet.

Austin-based Endeavor Real Estate secured financing to build a luxury apartment high-rise at 2700 McKinney Avenue in Uptown. Additionally, StreetLights Residential snagged $54 million in equity financing for an apartment tower in Plano, Texas, which will be built in the redevelopment of The Park at Legacy at 6501 Legacy Drive.

Another city cuts ties with Hoque Global

Developer Mike Hoque’s Hoque Global can’t seem to abide by development agreements either. Mansfield became the second North Texas city to drop the developer over deadlines, the Dallas Business Journal reported. Hoque missed a 2024 deadline to develop a $50 million mixed-use project in Mansfield’s downtown. Mansfield tapped Bridgeview to put up where Hoque left off. Missed deadlines also pushed Fort Worth to cut Hoque out of its Evans and Rosedale Urban Village project. Hoque has another opportunity to prove itself in Downtown Dallas, where it’s partnering with PegasusAblon on a project to redevelop the massive Bank of America campus.

Musk triples Central Texas landholdings

Elon Musk is expanding his Central Texas empire. The eccentric trillionaire, who moved his companies to Texas from California in the last five years, amassed 2,000 acres in Bastrop, the Austin exurb that’s home to facilities for Musk’s tech companies, the Austin Business Journal reported. A few months prior, entities tied to Musk only owned 700 acres in the area. It’s not clear what he plans to do with the land.