Developer Nate Paul Pleaded Guilty, Avoids Trial

Austin developer Nate Paul has admitted to lying to lenders to obtain more than $172 million in loans.

The head of World Class Holdings, whose properties in 17 states were once valued at $1 billion, pleaded guilty to one federal charge of making false statements to a lending institution, KXAN Investigates reported.

The plea ends an 18-month federal bank and wire fraud case in which Paul faced a jury trial and decades in federal prison. The trial, once set for Feb. 18, had been expected to last for weeks.

If the plea deal is accepted, Paul’s sentence will be capped at 6 months, with the remaining 11 counts dismissed, according to U.S. Magistrate Judge Dustin Howell, who oversaw the plea.

Federal prosecutors recommended no more than six months in prison, five additional years of supervised release and a maximum $1 million fine. His sentence date has not been set.

The plea agreement ends the uncertainty surrounding Paul’s legal troubles, marking his fall from the top of Austin’s commercial real estate industry, where the 37-year-old developer owned multi-million-dollar properties across the city.

He and his companies once owned an estimated $1 billion portfolio that included office buildings, shopping centers, self-storage facilities, apartments and student housing, according to Forbes, including the KPMG Tower in Downtown Dallas.

Cracks in Paul’s real estate empire became visible after a 2019 FBI raid on his home and business headquarters, according to KXAN.

The Feds indicted Paul in June 2023 on eight counts of bank fraud, accusing him of making false statements to lenders to obtain over $172 million in loans by inflating the account balances at World Class and obscuring debts. In November of that year, prosecutors added four additional wire fraud charges in a superseding indictment.

Many of his World Class companies have since filed for bankruptcy. Paul also became entangled in allegations of abuse of office against Texas Attorney General Ken Paxton.

In November, Paul was ordered to serve a 10-day jail sentence for contempt of court, for perjury, and violating an injunction in a civil lawsuit against a charity, according to records from Travis County District Court.

The civil case linked Paul to allegations against Paxton for disregarding his official duty by using his office to assist Paul in the lawsuit.

The allegation helped lead to the impeachment of the attorney general, who was accused of misusing his power to have legal opinions written to help Paul avoid foreclosures and by obtaining previously undisclosed information to assist Paul, according to the articles of impeachment.

Paxton was ultimately acquitted on all the counts against him in a State Senate trial in 2023.

— Dana Bartholomew