Federal court hearing Wednesday on Nate Paul's wire and bank fraud counts

AUSTIN (KXAN) – Real estate investor Nate Paul’s defense team will gather for a hearing Wednesday at Austin’s federal district courthouse for a hearing over a motion to suppress information in his case. Paul, 37, faces a dozen felony counts.

The charges against Paul include four counts of wire fraud and eight counts of making false statements to banks to obtain loans. The wire fraud counts each carry a maximum penalty of 20 years in prison and $250,000, while the bank fraud counts each have a potential penalty of 30 years behind bars and a $1 million fine, according to the U.S. Department of Justice.

Paul’s federal trial date has been pushed multiple times. In June, Paul’s attorneys told U.S. District Judge David Ezra they needed more time to get a massive amount of evidence in the case – amounting to more than 4.4 million documents – uploaded by a third-party vendor. U.S. Federal District Judge David Ezra rescheduled the trial to February 2025.

Paul has pleaded not guilty to all the counts against him. The federal charges are tied to his work as chief of World Class Holdings, a billion-dollar real estate enterprise based in Austin.

Paul was first indicted in June 2023 on eight counts of making false statements to lenders. In November of that year, federal authorities tacked on the four wire fraud counts in a superseding indictment.

In early October, Paul’s attorneys filed two motions – one to dismiss all charges against him and another to sever the counts against him by separating the wire fraud charges from those of making false statements to lenders.

In his motion to sever the cases, Paul argued the counts for making false statements and the counts for wire fraud should not be joined. The counts are “not of a similar character, nor part of the same transaction, nor part of a common scheme,” according to the filing. He also said joining the counts would cause “undue prejudice” at trial, according to the motion.

Paul’s motion to dismiss argued the state failed to lay out an essential element of his offenses in each count of the indictment, namely that he “acted willfully.”

“Accordingly, the Court should dismiss the Superseding Indictment for failure to state an offense,” according to Paul’s motion to dismiss.

Ties to Paxton, civil litigation and potential jail sentence

Paul is still dealing with the fallout of a legal battle with the nonprofit Mitte Foundation. The charitable foundation sued Paul years ago over investments it made in Paul’s real estate business.

Texas Attorney General Ken Paxton was accused of wrongfully using his power to assist Paul in that case. Paxton was impeached over that allegation – among others – but was acquitted in a high-profile state senate trial in Sept. 2023.

Paul lost the lawsuit after an arbitration award of over $1.9 million went in favor of the Mitte Foundation, according to court records.

Paul appealed that decision, and a Travis County District Court Judge Jan Soifer issued an order against him for criminal contempt in the case, court records show.

Paul was accused of perjury and violating an injunction. Soifer sentenced him to 10 days in jail. Paul continues to fight that sentence and currently has a petition for writ of habeas corpus pending in federal district court, which Ezra is also handling.