AUSTIN (KXAN) – Recent federal court filings show Austin real estate developer Nate Paul battling on two legal fronts. On one side he’s fighting a potentially “imminent” 10-day jail sentence for criminal contempt issued by a Travis County district judge in a civil case. On the other side, Paul is seeking to get a dozen criminal counts of bank and wire fraud dismissed.
Paul has been ensnared in legal proceedings for years, including civil litigation with the nonprofit Mitte Foundation, which sued Paul over millions of dollars it invested in his real estate company, World Class. The lawsuit tied Paul to allegations against Texas Attorney General Ken Paxton that Paxton disregarded his official duties to help Paul. Paxton was impeached for those and other allegations but was acquitted last September.
The Mitte Foundation invested in World Class in 2011 but sued the company in 2018 after a disagreement over access to financial records and regaining their funds, according to court filings. An arbitrator sided with the Mitte Foundation in 2021 – a decision that was upheld after the Texas Supreme Court denied an appeal. Amid those court battles, Paul violated orders by Travis County District Judge Jan Soifer, according to her court order.
‘10-day jail sentence is imminent’
On March 31, 2023, Soifer sentenced Paul to 10 days in jail for six counts of contempt of court. Soifer found Paul had violated a June 2022 injunction by failing to report transfers over $25,000 and committing perjury, according to court records.
Paul has fought the sentence at practically every level of the legal system available to him. On Oct. 22, Paul filed a petition for a writ of habeas corpus in the U.S. District Court. That same day he filed an emergency petition for writs of habeas corpus and mandamus in the Texas Court of Appeals for the Third Judicial District.
In his latest federal filing, Paul said, “Soifer unconstitutionally imposed jail sentences without conducting a sentencing hearing, which denied petitioner his constitutional rights to the assistance of counsel, to physical presence, and to present mitigation.”
Paul was ordered to turn himself in to jail on April 10, 2023, but that was later changed, after appellate hearings, to April 1, 2024. The jail sentence was stayed by the Texas Supreme Court while the U.S. Supreme Court considered a petition of writ of certiorari by Paul to consider his case. The U.S. Supreme Court denied Paul’s petition on Oct. 15, court records show.
“Since the denial of the petition, the Mitte Foundation has filed a motion with the Texas Supreme Court to lift the stay, meaning that Mr. Paul’s 10-day jail sentence is imminent,” according to Paul’s federal petition filed Tuesday.
Ray Chester, an attorney representing the Mitte Foundation, told KXAN in a statement that Paul’s latest habeas attempt contains the same grounds that were denied in Paul’s petition to the U.S. Supreme Court. Paul’s petition “appears to be a last gasp attempt to delay the inevitable.”
Paul previously received support in his fight against the jail sentence. In May 2023, the National Association of Criminal Defense Lawyers filed an amicus brief in support of Paul and asked the Texas Supreme Court to vacate the criminal contempt order.
“The district court in these criminal contempt proceedings contravened the basic premise that all defendants are entitled to due process of law before the state may take away their liberty,” the Association wrote in its brief.
An attorney representing Paul in the Mitte Foundation case did not respond to KXAN’s request for comment.
Attorneys representing the Mitte Foundation also did not respond to KXAN’s inquiry before publishing time.
Federal criminal case
Separate from his legal saga against the Mitte Foundation, Paul faces 12 federal criminal counts.
The charges include one count of conspiracy to commit wire fraud, three counts of wire fraud and eight counts of making false statements to lenders to obtain approximately $172 million, according to the indictment.
The wire fraud charges allege Paul defrauded partners in limited partnerships by falsely stating bank account balances and debts, as well as using funds from limited partnerships in pay expenses of other companies, according to the indictment.
Federal authorities first charged Paul with eight counts of making false statements to lenders in June 2023. In November of that year, prosecutors added four wire fraud charges in a superseding indictment.
Paul has pleaded not guilty to all counts. A KXAN request for comment from Paul’s criminal defense attorneys was not returned.
On Oct. 9, Paul filed a motion to dismiss the dozen counts in the superseding indictment on the grounds that federal prosecutors failed “to allege the essential element of willfulness across all charges,” according to the document.
Paul argued an indictment must contain all elements of the charged offense or be dismissed, and all the counts “fail to allege that Mr. Paul acted “willfully.”
Paul also filed a motion to sever on Oct. 9, asking the court to separate the wire fraud and bank fraud counts that were grouped together in the superseding indictment. Paul argued the charges should not have been joined, do not share a “similar character” and weren’t part of the same transaction or common scheme, according to the filing.
“Evidence pertaining to the Investor Counts would not be admissible against Mr. Paul in a trial limited to the Lender Counts, and vice versa,” according to Paul’s motion. “Unless these counts are severed, Mr. Paul will inevitably suffer undue prejudice.”
After being reset twice, U.S. District Judge David Ezra rescheduled Paul’s trial to February 2025. Paul’s attorneys asked for the postponement to allow for analysis of 4.4 million documents in the case, according to court records and testimony.
