Troubled Austin investor Nate Paul faces growing legal challenges that threaten his personal freedom and the future of his assets.

Paul finds himself embroiled in two major legal battles: one at the state level, where he faces a potential sentence of 10 days in jail for criminal contempt, and another at the federal level, where he is charged with a dozen counts charges related to bank and wire fraud, KXAN. reported.

The developer’s legal troubles stem from a contentious relationship with the Mitte Foundation, a nonprofit that invested millions in Paul’s company, World Class Holdings, in 2011. However, disputes over financial transparency led Mitte filed suit in 2018. An arbitrator ultimately ruled in favor of the Mitte Foundation in 2021, with the Texas Supreme Court subsequently rejecting Paul’s appeal.

The dispute with Mitte escalated when Travis County District Judge Jan Soifer imposed strict financial reporting requirements on Paul, with court documents showing he was required to disclose all top financial transactions at $25,000. The judge then ruled that Paul violated those orders by allegedly committing perjury and concealing details of specific transactions.

He was ordered to report to prison in April 2023, but the sentence was repeatedly delayed, most recently until last April while his lawyers appealed. Paul’s defense recently filed a federal petition for habeas corpus, arguing that the judge’s order did not include a proper sentencing hearing, violating his due process rights.

The Mitte Foundation, however, is pushing for the Texas Supreme Court to enforce the sentence, with Mitte’s attorney Ray Chester calling Paul’s efforts “a last-ditch attempt to delay the inevitable.”

In addition to his legal troubles, Paul, who was recently declared Travis County’s most delinquent taxpayer for the third year in a row, faces federal charges accusing him of defrauding investors and lenders out of $172 million. dollars in loans by inflating World Class account balances and hiding debts.

Four of the charges involve wire fraud and focus on Paul’s alleged deception of his company’s limited partners, claiming he misrepresented financial terms to investors.

His lawyers argue that the indictment fails to establish that he acted with “will,” a crucial element in proving fraud. His legal team also filed a motion to separate the wire fraud and bank fraud counts, saying the two cases are different in nature and would create undue prejudice if tried together.

Paul’s trial is scheduled for February, which will give his defense time to review more than 4 million documents filed as evidence.

— Andrew Terrell

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