Embattled Austin investor Nate Paul faces mounting legal challenges that threaten his personal freedom and the future of his holdings.
Paul finds himself embroiled in two major legal battles — one state-level, where he faces a potential 10-day jail sentence for criminal contempt, and another federal, where he’s accused of a dozen criminal counts related to bank and wire fraud, KXAN reported.
The developer’s legal troubles stem from a contentious relationship with the Mitte Foundation, a nonprofit that invested millions into Paul’s company, World Class Holdings, in 2011. However, disputes over financial transparency led Mitte to sue in 2018. An arbitrator ultimately ruled in favor of the Mitte Foundation in 2021, with the Texas Supreme Court subsequently denying Paul’s appeal.
The dispute with Mitte escalated when Travis County District Judge Jan Soifer imposed strict financial reporting requirements on Paul in 2022, with court documents showing he was required to disclose all financial transactions over $25,000. The judge later ruled that Paul had violated these orders by allegedly committing perjury and withholding details on specific transactions.
He was ordered to surrender himself to jail in April 2023, but the sentence was delayed multiple times, most recently until this past April, as his attorneys pursued appeals. Paul’s defense recently filed a federal writ of habeas corpus, arguing that the judge’s order lacked a proper sentencing hearing, thus violating his due process rights.
The Mitte Foundation, however, is pushing for the Texas Supreme Court to enforce the sentence, with Mitte’s attorney Ray Chester calling Paul’s efforts “a last gasp attempt to delay the inevitable.”
Adding to his legal troubles, Paul, who was recently declared as the most delinquent taxpayer in Travis County for the third consecutive year, faces federal charges accusing him of defrauding investors and lenders out of $172 million in loans by inflating World Class’s account balances and obscuring debts.
Four of the charges relate to wire fraud and focus on Paul’s alleged deception toward limited partners in his business, claiming he misrepresented financial conditions to investors.
His attorneys argue the indictment fails to establish that he acted with “willfulness,” a crucial element in proving fraud. His legal team also filed a motion to sever the wire fraud and bank fraud counts, claiming the two cases are different in nature and would create undue prejudice if tried together.
Paul’s trial is scheduled for February, giving his defense time to review over 4 million documents entered as evidence.
— Andrew Terrell
Read more
Commercial
Austin
Lender tries to foreclose on Nate Paul’s property for 15th time
Commercial
Austin
Nate Paul is Travis County’s most delinquent taxpayer again
Commercial
Austin
Katz’s klosed but could make comeback with sale of Nate Paul building