Mogul tied to Texas AG Ken Paxton’s impeachment scandal is sued

A Texas businessman at the center of the scandal that led to the historic impeachment of state Attorney General Ken Paxton has been hit with federal indictment.

Real estate developer Nate Paul, 36, was charged on Friday with eight counts of making false statements while seeking loans from mortgage lenders in 2017 and 2018.

The federal indictment against Paul is the culmination of years of an FBI investigation — an investigation involving Paxton’s office led to a chain of events that ultimately led to his impeachment and suspension last month.

Paxton, a Republican, was impeached on 20 articles last month by the state’s GOP-led House amid allegations that he took bribes and misused his powers to help Paul in various ways.

Paul did not enter a plea during his first appearance in a federal court in Austin, nor visibly reacted when the charges against him were read.

Ken Paxton, a Republican, was impeached on 20 articles last month by the state’s GOP-led House amid allegations that he took bribes and abused his powers to help Paul

He entered the federal courtroom handcuffed and wearing jeans, a blue shirt and Nikes, and was released prior to trial, but was ordered to surrender his passport and notify the court of any travel outside of Texas.

One of Paul’s lawyers, David Gerger, said his client will be allowed to comment after his appearance in court. Dan Cogdell, Paxton’s attorney, said Thursday he had no information about the arrest.

Paul is accused of overestimating his assets and underestimating his liabilities when seeking loans. In some cases, prosecutors said, Paul told banks he had $18 million in an account when he had less than $13,000.

In another case outlined in the 23-page indictment, Paul is accused of having $28 million in liabilities but giving a credit union a much lower number in 2018,

FBI agents investigating Paul’s troubled real estate empire searched his Austin offices and his palatial home in 2019.

The following year, eight of Paxton’s top deputies reported to the Attorney General at the FBI on allegations of bribery and abuse of office, including for hiring an outside attorney to investigate the developer’s allegations of misconduct by federal agents.

The allegations by Paxton staff sparked an FBI investigation, which is still ongoing, and are at the center of 20 articles of impeachment overwhelmingly approved by the GOP-led House of Representatives. They include abuse of public trust, incapacity for office and bribery.

The impeachment accuses Paxton of using his office to aid Paul in his unproven claims of an elaborate conspiracy to steal $200 million from the developer’s property.

Nate Paul, right, attends the 2011 Texas Inaugural Celebration at the Palmer Events Center in Austin, Texas. Paul was charged in a federal indictment that was unsealed Friday

Nate Paul allegedly hired a woman with whom Paxton had an extramarital affair and paid for expensive renovations to the attorney general’s house in Austin, worth a million dollars

According to bribery counts, the developer in return hired a woman with whom Paxton was having an extramarital affair and paid for expensive renovations to the attorney general’s home in Austin, worth a million dollars.

Paxton’s lawyers attempted to refute the latest allegation this week by releasing a bank statement containing a wire transfer from 2020 that reportedly showed that Paxton, not a donor, paid more than $120,000 for a home renovation. But the document raised new questions about the men’s intercourse.

The wire transfer was dated October 1, 2020 — the same day, Paxton deputies signed a letter informing the Chief of Human Resources at the Texas Attorney General’s Office that they had reported their boss to the FBI.

The $121,000 payment was to Cupertino Builders, whose manager had done work for Paul and had an email address with his company, state company and court records show.

Paul has faced numerous lawsuits from creditors and business associates over the years, with several of his businesses filing for bankruptcy or being placed under the supervision of court-appointed overseers.

The impeachment accuses Paxton of using his office to aid Paul in his unproven claims of an elaborate conspiracy to steal $200 million from the developer’s property.

Last year, one of those trustees wrote in a report that Cupertino Builders was being used for “fraudulent transfers” from Paul’s case.

Paul has denied bribing Paxton. The attorney general has also denied general wrongdoing and said he expects to be acquitted during an impeachment trial in the Senate, of which his wife is a member.

The Senate will create its own rules for a process that has little precedent, given that Paxton is just the third incumbent in Texas history to be impeached. The procedure will start no later than August 28.

Paxton was charged separately in 2015 on securities fraud charges, though he has yet to face trial.