"Data" sounds like a directory, not a file. You'll have to create it first. You also appear to have reversed the arguments. Fix:
if not exist "$(TargetDir)Data" mkdir "$(TargetDir)Data".
xcopy "$(ProjectDir)Data\*.*" "$(TargetDir)Data" /Y /I /D
If you in fact meant to copy back to the project directory, very unusual, then just swap TargetDir and ProjectDir in the above snippet.