Nate Paul, real estate investor in Paxton corruption allegations, ordered to jail after appeal defeat
Nate Paul, the Austin-based real estate developer, has been ordered to serve ten days in jail after losing an appeal in a fraud case with the Roy F. & Joann Cole Mitte Foundation, a local nonprofit. The 3rd Court of Appeals in Austin denied Paul’s appeal to overturn a lower district’s order, finding him in contempt of court for lying about money transfers that exceeded a court-imposed spending limit.
Although the appeals court agreed with Paul that some of the violations should be removed from the order, it upheld the lower court’s finding of contempt and sent the case back down for the district court to act.
Within hours of the ruling, state District Judge Jan Soifer in Austin issued an amended order that accused Paul of six violations of the law, instead of eight, and ordered him to report to the Travis County Jail by 10 a.m. on April 10 to serve his sentence. The court-ordered sanctions against Paul came in a lawsuit between the real estate developer and the Mitte Foundation after Paul refused to make financial disclosures about endowment money the nonprofit had invested in his businesses.
Ray Chester, an attorney for the Mitte Foundation, expressed his satisfaction with the court’s decision, which was made after the nonprofit attempted to collect $2 million that it had won against Paul in court. Chester stated that his clients were “gratified” by the ruling.
Brent Perry, an attorney for Paul, was unavailable for comment. He had previously argued that Judge Soifer’s order did not apply to Paul’s business accounts and that she should be removed from the case for being biased against his client.
Paul is central to allegations of corruption made against Texas Attorney General Ken Paxton by eight of his former top deputies. These deputies accused Paxton of misusing his office to benefit Paul, a friend and donor who had contributed $25,000 to Paxton’s campaign in 2018. Among the allegations was Paxton’s push to involve the attorney general’s office in the Mitte Foundation’s lawsuit, despite never previously showing interest in cases involving charities. In exchange, Paul allegedly helped Paxton remodel his multimillion-dollar home, donated to his campaigns, and hired his alleged mistress. Paxton is married to state Sen. Angela Paxton, R-McKinney.
Although the eight top deputies who accused Paxton of corruption were either fired or resigned, their reports prompted an FBI investigation into Paxton that is now being led by the U.S. Department of Justice. Currently, no charges have been filed, and both Paul and Paxton have denied the allegations.
In June of last year, Judge Soifer issued an order that required Paul to report any spending over $25,000 by him or his businesses that could be used to pay the $2 million judgment he owed Mitte. The order also required Paul to share monthly reports of his spending with the court.
However, Paul did not submit those reports for five months, and when he finally did, the nonprofit’s lawyers argued that he 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 asked about the payment at the hearing, Paul claimed that he did not remember it, only to later acknowledge the payment in an amended report to the court. Judge Soifer found that the payment violated her order because it was not made for “fair value” since 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.
“Mr. Paul’s lies to the court while under oath were pervasive and inexcusable, and served to deliberately thwart the functions of the Court,” Soifer wrote.
The appeals court threw out three other violations for a separate $963,000 payment made by another of Paul’s companies, Westlake Industries, because Soifer had not given Paul “full and unambiguous” notice that he could be held in contempt for those violations.
In her new order, Soifer berated Paul for repeatedly disobeying the court orders in the case and other related lawsuits.
“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,” she wrote.
