Nate Paul found in contempt of court, fined, ordered to serve jail time

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Nate Paul, an Austin actual property investor who used to be central to allegations of unlawful behavior by way of Texas Attorney General Ken Paxton, has been found in contempt of courtroom, fined greater than $180,000 and ordered to serve jail time by way of a state pass judgement on in Travis County.

In October 2020, best deputies in Paxton’s company advised federal government that they believed the lawyer common misused his authority to get advantages Paul, a pal and marketing campaign donor. Those 8 best deputies had been fired or resigned, however their allegations spurred an FBI investigation into Paxton this is now being led by the U.S. Department of Justice.

Paxton and Paul have denied the allegations, which have been had been detailed in a whistleblower lawsuit by way of 4 former Paxton deputies who claimed they had been improperly fired in retaliation for reporting their suspicions to investigators.

The court-ordered sanctions towards Paul got here in a lawsuit between the true property developer and The Roy F. & Joann Cole Mitte Foundation, an Austin-based nonprofit that sued Paul for fraud.

Ray Chester, an lawyer for the Mitte Foundation, mentioned his shoppers had been happy by way of the verdict from state District Judge Jan Soifer, which used to be printed in a letter despatched Friday to legal professionals for Paul and Mitte.

“We feel vindicated by the decision,” Chester mentioned, calling it “one of the steps to getting justice.”

Brent Perry, Paul’s lawyer, didn’t instantly reply to a request for remark. It used to be unclear if he would enchantment the verdict.

According to the whistleblower lawsuit, Paxton overrode a call by way of his company’s Charitable Trust Division and directed the lawyer common’s place of work to interfere in the Mitte Foundation lawsuit towards Paul. “It used to be unusual, making an allowance for that (Paxton) had by no means achieved so earlier than and even proven any passion in a charity case,” the lawsuit mentioned.

The whistleblowers additionally alleged that Paxton helped Paul achieve get right of entry to to investigative paperwork comparable to 2019 searches of Paul’s house and trade by way of federal and state investigators. Paul argued the searches had been fallacious, however after company legal professionals decided that the declare used to be with out advantage, Paxton went past standard procedures to make certain that an out of doors suggest used to be employed to examine, the whistleblowers alleged.

In addition, Paxton ordered a written opinion that used to be revealed at 2 a.m. on a Sunday declaring that foreclosures gross sales had to be suspended beneath pandemic protection regulations, which benefited Paul by way of delaying a foreclosures sale for one of his houses two days later, in accordance to the whistleblowers.

In go back, the whistleblowers mentioned, Paul gave Paxton a $25,000 marketing campaign donation, paid to transform his house and hired Paxton’s mistress. Paxton is married to state Sen. Angela Paxton, R-McKinney.

According to a Friday letter despatched by way of a workforce lawyer for Soifer, the pass judgement on found Paul in civil and felony contempt, concluding that he had presented false testimony. He used to be ordered to serve 10 days in jail starting March 15.

“Mr. Paul’s flagrant lies to the Court while under oath were pervasive and inexcusable, and served to deliberately thwart the functions of the Court in enforcing its injunction,” Elliott Beck, a workforce lawyer for Soifer, wrote in the letter.

Beck added that Paul’s movements had been “part of a pattern of non-compliance with court orders.” Paul used to be fined $181,760 for violating the courtroom order.

Last June, in an try to pressure Paul to pay the Mitte Foundation a $2 million judgment the nonprofit had gained towards him, Soifer issued an injunction ordering Paul to make per 30 days expenditure reviews to the courtroom and barring him from spending greater than $25,000 at a time.

Paul didn’t document reviews for 5 months, Chester mentioned, and the Mitte Foundation requested Soifer to cling him in contempt. In a November listening to, the nonprofit’s legal professionals argued that Paul had paid about $960,000 to Westlake Industries, an organization Paul owns, and $100,000 to Avery Bradley, a former University of Texas and NBA basketball participant who had filed a breach of contract lawsuit towards Paul’s company, World Class Holdings.

The nonprofit’s legal professionals faced Paul along with his financial institution information appearing the $100,000 switch to Bradley, which Paul mentioned he didn’t acknowledge. Soifer then recessed the listening to for per week to give Paul time to acquire financial institution information and determine all of his financial institution accounts, which the courtroom mentioned he failed to do.

The nonprofit’s legal professionals had been in a position to download financial institution information for Westlake Industries, which confirmed a $967,000 fee at the day the injunction went into impact.

“The timing was really suspicious, and he owns 100% of Westlake Industries,” Chester mentioned.

In his letter, Beck mentioned Paul “offered false testimony, committing perjury, sitting in the witness box just a few feet away from the Court, in responding to multiple questions by counsel and the Court.”

“He lied about both transfers referenced above and he lied about his personal bank accounts, even when confronted with evidence of such accounts,” Beck wrote. “He failed and refused to produce documents of such accounts, even after the hearing was recessed for a week to give him time to gather such documents.”

Chester mentioned he’s these days drafting the violation order at Soifer’s path.

The Mitte Foundation first invested an element of its endowment in Paul’s firms in 2011. The nonprofit later sued Paul for breach of contract for failing to make monetary disclosures.

Through one of Paul’s firms, the Mitte Foundation holds section possession in two downtown Austin structures which might be beneath contract on the market for a blended $172 million, of which the Mitte Foundation would get a “significant portion,” in accordance to Chester. The shut of the sale used to be not on time by way of a Paul enchantment, which used to be just lately denied by way of the Austin-based third Court of Appeals, even though Paul’s legal professionals have a number of months to search evaluate by way of the Texas Supreme Court.