Fraud charges against developer Tim Barton spur land sale at The Gate in Frisco

Dallas Business Journal
By Bill Hethcock  –  Senior Reporter, Dallas Business Journal
Jan 26, 2023

A prime development site along the Dallas North Tollway in Frisco is slated to be sold out of a receivership holding properties owned by a prominent North Texas real estate developer who’s facing federal fraud charges.

The 4.5-acre property that’s up for sale is part of the 41-acre master-planned development site called The Gate in Frisco. The Gate is part of Frisco’s North Platinum Corridor in an area formerly known as the $5 Billion Mile — a highly planned and heavily marketed assemblage of multiple mixed-use developments on both sides of the Dallas North Tollway between State Highway 121 and U.S. 380.

A federal judge has set a Jan. 31 date to consider approval of the sale of the 4.5 acres of undeveloped land referred to in court documents as the Frisco Gate property. A $9 million offer for the property is on the table, but the site could sell for more.

The property on the northwest corner of John Hickman Parkway and Dallas Parkway is one of about a dozen properties being held in a court-appointed receivership tasked with monitoring the assets and entities of developer Tim Barton, owner and president of Dallas-based JMJ Development. Barton and JMJ previously planned a 28- to 30-story luxury hotel and condo tower on the land. 

When the project was announced in 2020, JMJ officials promoted it as “the tallest building in Frisco” and said it would open in 2024. The project, as envisioned by JMJ, was supposed to have about 230 hotel rooms, 70 condos, and 15,000 square feet of office space, as well as signature restaurants and an amenity deck that had a pool with 360-degree views of the city.

JMJ purchased the land from Dubai-based Invest Group Overseas in February 2020.

Barton, who is CEO of Dallas-based investment firm Carnegie Development in addition to leading JMJ, is currently facing charges related to the alleged bilking of Chinese investors out of $26 million involving land sites for housing communities in North Texas. 

Barton was indicted in September by a federal grand jury on nine felony counts, including securities fraud, wire fraud and conspiracy to commit wire fraud. He has pleaded not guilty to the charges, and a trial is scheduled for later this year. If convicted, Barton faces up to 60 years in prison, according to the U.S. Attorney’s Office for the Northern District of Texas.

Also in September, the U.S. Securities and Exchange Commission filed a civil suit against the Dallas developer. The SEC case followed a two-year investigation.

In the civil and criminal cases, the federal government alleges the Chinese investors were told they were investing in suburban land development deals for housing communities to supposedly be built in Parker, Kaufman, Tarrant and Johnson counties and elsewhere in North Texas. Among other allegations, the indictment claims that most of the properties were never actually purchased by Barton and investor funds were “misappropriated to other projects.”

On Oct. 18, at the request of the SEC, the U.S. District Court for the Northern District of Texas appointed attorney Cort Thomas to be receiver for all entities and properties controlled directly or indirectly by Barton. The 25-page receivership order tasked Thomas with protecting the value of the properties, which could be sold and the proceeds used to compensate victims if Barton is found guilty of fraud or if Barton or his companies are found to have otherwise wronged the investors. Thomas says in court filings that he needs to sell some of the properties immediately to pay ongoing operational, property management and legal expenses.