Paul gets 10 days for criminal contempt
Had ignored injunction in fraud case, judge says
Nate Paul, a former Austin real estate developer once celebrated by Forbes, will be required to serve a 10-day jail sentence no later than April 1 for criminal contempt in a civil case in which Paul is accused of defrauding a nonprofit, according to a court order handed down Monday.
The ruling by Travis County state District Judge Jan Soifer is a reconfirmation of a previous 10-day sentence she handed down in 2023, which Paul unsuccessfully appealed to the Texas Supreme Court.
“Mr. Paul’s 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,” Soifer’s Monday order said.
In a split 5-4 decision last week, the state’s high court lifted a pause on Soifer’s original order meant to punish Paul on six separate counts of criminal contempt, opening the door for Monday’s order further compelling Paul’s stay at the Travis County Correctional Center by April 1.
Over her five-page order, Soifer condemned Paul’s behavior in ignoring a 2022 injunction that required him to report money transfers of more than $25,000. While Paul was allowed to make transfers over $25,000 in situations of “fair value,” Paul was required to detail those exchanges in monthly reports to the court for all assets exceeding the benchmark.
Soifer said Paul has “continuously refused” to comply with the injunction, citing a specific $100,000 transfer to an unnamed NBA player in June 2022 that Paul neglected to report in court-order financial records.
“Mr. Paul did not receive anything of value from the NBA player and Mr. Paul admitted he did not personally owe the NBA player any money,” Soifer’s order reads, saying Paul’s testimony on the issue is not credible. “Mr. Paul was aware that the $100,000 transfer violated the Injunction, as a prohibited transfer not for fair value.”
In appealing Soifer’s initial order, Paul sought writs of habeas corpus and mandamus — motions to challenge a potentially unlawful detention — arguing that the initial dispute with the Roy F. and Joann Cole Mitte Foundation over
financial records and claims that he defrauded the nonprofit unjustly transitioned from a civil proceeding into a criminal matter.
Paul and his attorneys have said the court should toss out the criminal punishment, pointing to insufficient notice of the contempt allegations and a lack of sufficient evidence to “support any of the criminal contempt convictions.”
Originally, Soifer handed down eight counts of criminal contempt, but as Paul and his attorneys have fought the criminal charges, two were vacated by the 3rd Court of Appeals before the case reached the state Supreme Court.
Attorneys representing Paul did not respond to an American-Statesman request for comment Tuesday after Soifer’s order.
In deciding against Paul’s motion to prevent his jail sentence, the state Supreme Court was split over the issue, with four justices issuing a dissenting opinion on its ruling last week.
Led by Justice Jane Bland, the dissenting justices expressed concern over Paul’s complaint that criminal charges were being pursued in an inappropriate forum.
“The trial court permitted a judgment creditor to prosecute its debtor for acts of criminal contempt,” Bland wrote, referencing the Mitte Foundation’s arbitration effort against Paul. “The creditor sought to criminally penalize the debtor for perjury and for violations of an injunction the creditor obtained to aid in securing its judgment.”
Bland’s dissent letter was joined by Chief Justice Nathan Hecht and Justices John Devine and Brett Busby.
Paul, who has been inextricably associated with last year’s impeachment of embattled Texas Attorney General Ken Paxton, also faces a legal battle in federal court based on an eight-count indictment for wire fraud and a subsequent superseding indictment issued in November that levied four additional accusations of financial crimes.
During Paxton’s impeachment trial, the relationship between the two men was heavily scrutinized over claims that Paxton helped Paul, a campaign donor, get a favorable attorney general’s opinion to prevent foreclosures on his properties. In turn, Paul paid for a renovation to Paxton’s home, according to accusations by former top aides in the attorney general’s office who complained to the FBI. Those allegations were part of the 20 charges for which the Texas House on May 27 overwhelmingly voted to impeach Paxton.
The Texas Senate in September acquitted Paxton of wrongdoing, largely along party lines, after his impeachment trial in the upper chamber.
Paul’s federal wire fraud charges are set for trial in November in Austin, after Ezra, the district judge, denied a request in February to delay the proceeding until next year.
“Mr. Paul has repeatedly disobeyed Court orders in this litigation as well as in related litigation and the related arbitration and 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,” Soifer said in concluding her order Monday.