Controversial Texas developer Nate Paul faces ten days in jail

Nearly a year after Nate Paul was hit with additional fraud charges, the troubled Austin real estate developer is exhausting all resources to avoid a “looming” 10-day jail sentence in connection with a civil case.

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Nate Paul

Paul, CEO of World Class Capital, faces 12 federal charges of loan and wire fraud for allegedly making misleading and false statements to obtain money for other businesses and real estate purchases. These charges came to light last summer, along with details of Paul’s alleged inappropriate relationship with Texas Attorney General Ken Paxton.

But Paul is also looking at a contempt of court charge in connection with a civil battle between World Class Capital and the nonprofit Mitte Foundation, KXAN reported.

Travis County District Judge Jan Soifer sentenced Paul to 10 days in jail for contempt in March 2023 in that dispute. Since then, Paul has used virtually every legal maneuver possible to avoid punishment, and the U.S. Supreme Court on October 15 rejected a petition to review the case.

Paul filed another petition for habeas corpus, or a challenge to the validity of his sentence, in federal district court on Tuesday, a last-ditch effort to avoid time behind bars.

“Since (the Supreme Court’s) denial of the petition, the Mitte Foundation has filed a motion with the Texas Supreme Court to vacate the stay, meaning Mr. Paul’s 10-day jail sentence is imminent,” Pauls said latest federal petition. to KXAN.

The Mitte Foundation invested in World Class in 2011, but sued the company in 2018 when World Class allegedly refused to release financial information. According to court documents, the parties reached an agreement in 2019 that called for World Class to acquire Mitte’s stake in the limited partnerships for $10.5 million. Then in 2019, the FBI raided the offices of World Class Entities and Paul’s home, leaving his $1 billion real estate portfolio in trouble.

The raid took place four days before World Class Entities’ payment was due to Mitte, causing World Class Entities to inform Mitte that no payment would be made. Mitte sued again and the arbitration went ahead, court records show.

Soifer sentenced Paul to prison after finding he violated a court order by failing to report wire transfers of more than $25,000 and committing perjury, KXAN reported, citing court documents.

Paul’s latest petition “appears to be a last-ditch effort to delay the inevitable,” an attorney for the Mitte Foundation told KXAN in a statement.

The FBI arrested Paul on eight felony charges in early June 2023, just days after the Texas House of Representatives voted to impeach Paxton over claims including misuse of his office for Paul’s benefit. Paxton was acquitted in September.

Paul was charged with four more charges in November, with a trial scheduled for February. The combined charges include one count of conspiracy to commit bank fraud, three counts of bank fraud and eight counts of making false statements to obtain approximately $172 million in loans to purchase property.

But according to KXAN, Paul is also using legal maneuvers to get the federal charges dismissed. An Oct. 9 motion to dismiss argues that his indictment on the 12 federal charges fails “to allege that Mr. Paul acted ‘intentionally’.”

He has also filed a motion requesting that his bank fraud charges be kept separate because they are not part of the same transaction or a common scheme, KXAN reported.

“Unless these charges are separated, Mr. Paul will inevitably suffer undue prejudice,” the filing said.

U.S. District Judge David Ezra scheduled Paul’s trial to begin jury selection on February 18, in the middle of the prosecution’s and defense’s requested start dates of January 6 and March 17, respectively.

Although the trial had already been postponed twice, the defense said it needed time to review 4.4 million documents in the case.