Tie Lasater Lawsuit: Investor Suits, Cease and Desist, Bankruptcies

Tie Lasater, the former CEO of Southlake-based KeyCity Capital, is the subject of a Texas State Securities Board emergency cease and desist order and multiple investor fraud lawsuits tied to the collapse of his real estate funds. The Tie Lasater lawsuit landscape as of mid-2026 includes state regulatory action alleging he concealed more than $100 million in loan defaults from new investors, civil fraud cases pending in Iowa and California, an appeal in Texas, and a string of bankruptcies and foreclosures involving KeyCity-affiliated properties.¹

The Texas Emergency Cease and Desist Order

On June 9, 2026, the Texas State Securities Board issued an Emergency Cease and Desist Order against Tie Glenn Lasater, his brother Shiloh Boone Lasater, and their new firm Lasater Capital, LLC. Deputy Securities Commissioner Cristi Ramón Ochoa signed the order, which alleges the Lasaters were raising money for a new investment vehicle called Lasater RE Fund 14 while hiding the financial wreckage of their prior ventures under the KeyCity name.¹

According to the state, Fund 14 had raised roughly $5.6 million from 53 investors, targeting a total raise of about $10 million with marketed returns of up to 20% and a two-times equity multiple over five years. The board alleges the Lasaters offered these securities without a required state permit and could not claim a registration exemption because their solicitations contained materially misleading statements and omissions.²

The state’s central allegation is that the Lasaters touted a “successful track record” while intentionally failing to disclose that affiliated entities had experienced:

Loan defaults exceeding $100 million
Multiple Chapter 11 bankruptcies
Foreclosures on affiliated properties, including the Memphis portfolio
Judgments exceeding $24 million against KCAP Meadows entities
Receivership of the Meadows at Ferguson property in Dallas
Pending investor lawsuits alleging fraud, misrepresentation, elder abuse, and securities violations

The order requires the Lasaters and Lasater Capital to immediately stop offering or selling securities in Texas, stop acting as unregistered dealers or agents, and halt any investment advisory activity. The respondents had 31 days from service to request a hearing; without a timely request, the order becomes final and non-appealable.³

Investor Fraud Lawsuits

Skaugstad v. Lasater (Southern District of Iowa)

In November 2025, Charles Skaugstad and several affiliated entities sued Tie Lasater, KeyCity Capital, and KCAP RE Fund II for fraud in the U.S. District Court for the Southern District of Iowa. The case is categorized as “Other Fraud” under federal question jurisdiction. Defendants answered an amended complaint in January 2026, and KCAP RE Fund II simultaneously filed a notice of its bankruptcy. A jury trial is scheduled for March 29, 2027, before Chief Judge Stephanie M. Rose.⁴

Nobles v. Lasater (Southern District of California)

On March 31, 2026, Michele Nobles and Nobles Joshua Holdings, LLC filed a fraud lawsuit in the U.S. District Court for the Southern District of California against Tie Lasater, KeyCity Capital, KCAP RE Fund II, Charles Dombeck, and others. Judge Cynthia Bashant is presiding. As of mid-May 2026, the plaintiffs had filed a notice regarding the status of KCAP RE Fund II, likely tied to its bankruptcy, and the case remained in early stages.⁵

Hugar v. KeyCity Capital (Texas 11th Court of Appeals)

A case involving Terrence A. Hugar as appellee against KeyCity Capital, KeyCity Capital Fund Management, Tie Lasater, and Shiloh Boone Lasater as appellants started in the 67th District Court of Tarrant County, Texas, before Judge Donald J. Cosby. The KeyCity entities and the Lasaters appealed, and the case was transferred to the Texas 11th Court of Appeals, where briefing was underway in early 2026. The underlying claims are not detailed in available court records, but the Texas Securities Board’s order groups the matter among investor lawsuits alleging fraud and securities violations.⁶

KeyCity Bankruptcies

Several KeyCity-affiliated entities sought Chapter 11 protection in late 2025:

KCAP Villa Gardens LLC filed on November 19, 2025, in the Northern District of Texas.
KCAP Dominik LLC, which owned The Dominik Apartments in College Station, Texas, filed on December 3, 2025. That case was dismissed on April 22, 2026, pursuant to a settlement with creditor X-Caliber Funding LLC, and formally closed on May 7, 2026.⁷
KCAP RE Fund II LLC filed in December 2025, with a notice of the filing entered in the Skaugstad case in Iowa.⁴

The Dominik property shows the gap between KeyCity’s marketing and its financial reality. An independent Colliers appraisal in January 2025 valued the property at $12.4 million; KeyCity had claimed it was worth $25 million. Occupancy fell from 85% in 2022 to roughly 30% by late 2025.³

Foreclosures Behind the Allegations

The largest loss involved six Memphis apartment complexes KeyCity acquired in 2021 using $84.33 million in financing from Arbor Realty Trust. After KeyCity defaulted, an Arbor-affiliated entity bought the properties at a September 2025 foreclosure auction for $42.27 million, roughly half the outstanding debt.⁸

Other foreclosures followed the same month. The Joshua Landing project, a 100-unit multifamily property in Joshua, Texas, was foreclosed on by lenders in August 2025. Canyon Village in Bryan, Texas, went into foreclosure that month as well, with management transferring to a new owner.⁹ The Meadows at Ferguson in Dallas was placed under receivership after the city cited numerous code violations, and litigation involving the KCAP Meadows entities produced judgments exceeding $24 million against Lasater-controlled entities.²

Earlier and Resolved Cases

Two older federal cases are already closed. In April 2021, Kimberly Starling filed a putative class action against KeyCity Capital and Tie Lasater in the Northern District of Texas alleging Telephone Consumer Protection Act violations tied to prerecorded solicitation calls for financial seminar dinner events. The court ordered KeyCity to turn over call records after overruling defense objections, appointed a mediator in August 2021, and terminated the case on July 27, 2022. The terms of resolution were not publicly disclosed.¹⁰

In a separate case, Thom Besso brought defamation and Americans with Disabilities Act claims against KeyCity Capital and Tie Lasater in the Northern District of Texas. On January 24, 2025, Judge Mark Pittman granted the defendants’ motion for summary judgment, entering judgment for KeyCity and Lasater on all claims.¹¹

Where Things Stand

As of mid-2026, the Texas emergency order remains in effect pending any hearing request from the Lasaters. The Skaugstad fraud trial is set for March 2027, the Nobles case is proceeding in the Southern District of California, and the Hugar appeal is being briefed at the Texas 11th Court of Appeals. No SEC or FINRA action against Tie Lasater has been publicly reported.¹

1
Texas State Securities Board. Texas State Securities Board Enters Emergency Order Against Southlake Real Estate
2
Texas State Securities Board. Emergency Cease and Desist Order ENF-26-CDO-1898
3
Alts Wire. Texas Issues Emergency Order Against Lasater Capital Over Concealed $100M in Loan Defaults
4
Justia. Skaugstad et al v Tie Lasater et al
5
PACER Monitor. Nobles v Lasater et al
6
Judy Records. KeyCity Capital LLC v Terrence A Hugar
7
Inforuptcy. Bankruptcy Case KCAP Dominik LLC
8
Connect CRE. Return to Lender Week of Sept 18 2025
9
KBTX. Canyon Village Gets Two More Months as New Owners Work Repairs
10
CourtListener. Starling v KeyCity Capital LLC
11
GovInfo. Besso v KeyCityCapital LLC et al