Nate Paul faces jail time in fraud suit

Nate Paul’s legal troubles intensified over the weekend.

The Austin developer was ordered to spend 10 days in jail for contempt of court, the Houston Chronicle reported. Paul will also need to pay just over $180,000 in fines, according to a letter from Travis County District Judge Jan Soifer. 

Soifer handed down the punishments after Paul ignored a court order to report certain money transfers and lied about it.

“Mr. Paul’s flagrant lies to the court while under oath were pervasive and inexcusable, and served to deliberately thwart the functions of the court in enforcing its injunction,” a letter from Soifer’s staff reads. “Mr. Paul’s actions are part of a pattern of non-compliance with court orders.”

The lawsuit, one of several Paul faces as many of his companies go through bankruptcy, was filed by the Roy F. & Joann Cole Mitte Foundation, which is suing Paul for fraud related to its 2011 investment in his companies.

In July 2021, Soifer approved a $1.9 million arbitration judgment against Paul for the case and issued an injunction blocking Paul from moving his assets. The injunction required Paul to report all transfers greater than $25,000, but he allegedly flouted the order, transferring a little over $1 million in two unauthorized transactions. Soifer’s letter says Paul also committed perjury by lying about the transfers and his personal bank accounts during testimony. 

Paul’s attorney, Brent Perry of Burford Perry, said he will aim this week to stop entry of the order. Perry told the Chronicle that the transfers do not interfere with the nonprofit’s ability to collect the money it was awarded. He also claimed the order did not require Paul to report the transfers.

The suit is one of several facing Paul as he works to rebuild his Austin real estate empire. Paul has put more than two dozen of his ownership entities into bankruptcy in recent years, a move some creditors have said is meant to avoid foreclosure. 

Paul and Texas Attorney General Ken Paxton also face an FBI investigation looking into whistleblower complaints that Paul bribed Paxton by paying for a renovation at Paxton’s Austin home. Paul sued state and federal authorities, claiming he was improperly investigated, but the case was dismissed, and Paul is appealing.