Nate Paul, Paxton’s alleged corrupt real estate investor, returned to jail after appeal defeat
Nate Paul, a well-known real estate developer from Austin, Texas, at the center of the allegations of illegal conduct by the Texas Attorney General Ken Paxton, has been ordered to jail once again. This order follows his unsuccessful appeal in a fraud case with a non-profit where he has been found guilty of six violations of the law.
On Friday, the 3rd Court of Appeals in Austin denied Paul’s appeal to overturn a lower court’s order which mandated him to serve ten days in jail. Paul was found guilty of lying in a district court about money transfers he had made that exceeded a court-imposed spending limit. Although the appeals court agreed with Paul that some of the violations should be struck off the order, it kept in place the lower court’s finding of contempt of court.
Within hours of the court’s ruling, state District Judge Jan Soifer in Austin issued Paul an amended order, accusing him of six violations of the law, and ordered him to report to the Travis County Jail by 10 a.m. on April 10 to serve 10 days behind bars.
The court-ordered sanctions against Paul came in a lawsuit between the real estate developer and the Austin-based nonprofit, the Roy F. & Joann Cole Mitte Foundation. The foundation had sued Paul for fraud after he refused to make financial disclosures, straining their relationship.
Ray Chester, an attorney for the Mitte Foundation, said that they were “gratified” by the court’s ruling, which was made after the nonprofit tried to collect on $2 million that they had won against Paul in court.
Brent Perry, an attorney for Paul, could not be reached for comment. He argued that Soifer’s order did not apply to Paul’s business accounts and that Soifer should be removed from the case because of her bias against his client.
Paul’s involvement in allegations of corruption made against Paxton by eight of his former top deputies has raised suspicions. Those deputies told authorities that Paxton had misused his office to benefit Paul, a friend and donor. The investigation continues, led by the U.S. Department of Justice. Among the allegations was Paxton’s push to get the attorney general’s office involved in the Mitte Foundation’s lawsuit, despite never previously showing interest in cases involving charities. In return, Paul donated to Paxton’s campaigns, helped him remodel his multimillion-dollar home, and allegedly hired Paxton’s mistress, who is now at the center of the controversy.
Last June, Soifer issued an order that Paul report any expenditure over $25,000 by him or his businesses that could otherwise be used to pay the $2 million judgment he owed Mitte. The order required Paul to share monthly reports of his spending with the court. Paul did not submit those reports for five months. In November, a few days before the court would consider Mitte’s request to hold Paul in contempt, Paul filed his first report, but in court, the nonprofit’s lawyers argued that 12 days after Soifer’s order went into effect, Paul had paid $100,000 to Avery Bradley, a former University of Texas at Austin and NBA basketball player who had filed a breach of contract lawsuit against Paul’s firm, World Class Holdings.
When Paul was asked about the payment at the hearing, he said he did not remember making it, only to later acknowledge the payment in an amended report to the court. Soifer found that payment violated her order because it was not made for “fair value” because Paul did not receive anything in return. Soifer also found that Paul lied about bank statements in court and falsely swore under oath that he had made no payments over $25,000, in violation of her order.
In her new order, Soifer berated Paul for repeatedly disobeying court orders in this case and others related lawsuits. She wrote: “He has been sanctioned numerous times in the past, and such sanctions have failed to deter Mr. Paul from continued disobedience of court orders and lack of candor with the Court.”
As of today, no charges have been filed against either Paul or Paxton, and both have denied the allegations. The case is still ongoing, and we will update you as soon as new information emerges.
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