Judge Bennett Slams DOJ's $68M Colony Ridge Settlement: 'No Compensation for Victims'

A federal judge has sharply questioned the Justice Department's decision to move forward with a proposed $68 million settlement against Texas land developer Colony Ridge, highlighting a glaring omission: the deal offers no direct compensation to the Hispanic residents the DOJ itself accused the company of defrauding. Despite Judge Alfred H. Bennett's pointed concerns, the DOJ announced it would proceed with the agreement, setting up a potential judicial rejection of a major civil rights resolution.

During a hearing, Judge Bennett grilled a federal prosecutor over a $20 million provision in the settlement earmarked for police and immigration enforcement, noting that the original lawsuit against Colony Ridge—which operates massive subdivisions north of Houston—made no allegations related to public safety or immigration. 'I thought I was dealing with … folks who had been defrauded, with allegations of above-market interest rates, improper foreclosures,' Bennett stated, holding up the original complaint in one hand and the settlement in the other. 'Now, all of the sudden, I’m being asked to OK increased law enforcement.'

The judge's scrutiny exposes a fundamental tension in the case: a settlement ostensibly designed to address predatory lending practices now risks diverting funds away from victim restitution toward unrelated law enforcement priorities. This raises significant questions about the DOJ's enforcement strategy and whether the proposed resolution truly serves the interests of the alleged victims, potentially undermining the lawsuit's core civil rights claims. The judge's discomfort signals he may demand substantial revisions before approving any final agreement.