Nate Paul seeks to dismiss federal fraud charges in court
AUSTIN (KXAN) — Real estate developer Nate Paul’s defense will argue two motions Wednesday in federal court that could have a major impact on his bank and wire fraud case – one motion to dismiss the dozen counts against him and another to split the counts into two separate cases, according to court filings.
Paul, 37, was initially charged in June 2023 with eight counts of bank fraud alleging he made false statements to lending institutions to obtain $172 million in loans. Federal prosecutors added four more counts in a superseding indictment that November alleging he committed wire fraud against private investors in limited partnerships, court records show.
Each of the four wire fraud charges could carry up to 20 years in prison and $250,000 in fines. The eight bank fraud counts have maximum sentences of 30 years each and $1 million fines.
Paul has pleaded not guilty to all the charges against him. The federal charges relate to his work as head of the real estate company World Class, which used numerous companies to manage a vast real estate portfolio.
A civil case involving World Class companies and a charitable foundation was intertwined in allegations of abuse of office against Texas Attorney General Ken Paxton that were central to Paxton’s impeachment. Paxton was acquitted on all articles of impeachment against him in 2023.
Motions to dismiss and sever
In the motion to dismiss Paul argues prosecutors did not allege all the elements of the charges against him in the indictment – namely that he acted willfully.
“Willfulness is an essential element of each of these offenses, but these counts fail to allege that Mr. Paul acted ‘willfully,’” according to the motion to dismiss filed in October.
Government prosecutors responded that all 12 of the counts were adequately charged and the motion to dismiss should be denied.
Paul’s motion to sever, filed the same day as the motion to dismiss, asks the court to separate the wire and bank fraud counts. The counts should be split because they are not of a similar character, transaction or scheme, and they could lead to prejudice against Paul, according to his motion.
In their response, the government said the bank and fraud counts are properly joined because they are part of a common scheme or plan and share similar character.
“The purpose of the defendant’s deception is the same in every instance: financing the growth of the defendant’s real estate business and holdings through deception,” according to the government's response. “The character of the defendant’s misrepresentations is similar across all of the charges.”
Paul’s case is currently scheduled for trial in mid-February, but that could change. Both the defense and prosecution filed a joint motion for continuance in January asking Senior U.S. District Judge David Ezra to push the trial to April.