Texas businessman tied to impeachment of Attorney General Ken Paxton to appear in federal court

AUSTIN, Texas (AP) — A businessman at the center of the scandal that led to Texas Attorney General Ken Paxton’s historic impeachment is set to make an initial appearance in federal court Friday morning following his arrest by the FBI.

Nate Paul, 36, was taken into custody and booked into an Austin jail on Thursday afternoon, according to Travis County Sheriff’s Office records. Federal prosecutors are yet to reveal what charges led to his arrest, but the records showed he was being held on a federal detainer for a felony.

The Austin real estate developer’s arrest followed a yearslong federal investigation. Paxton involved his office in that probe, setting off a chain of events that ultimately led to his impeachment and suspension from office last month.

A lawyer for Paul, David Gerger, said his client may comment after his court appearance. One of Paxton’s defense attorneys, Dan Cogdell, said he had no additional information on the arrest.

FBI agents examining Paul’s troubled real estate empire searched his Austin hiring an outside lawyer to examine the developer’s claims of wrongdoing by federal agents.

The allegations by Paxton’s staff prompted an FBI investigation, which remains ongoing, and are central to 20 articles of impeachment overwhelmingly approved by the GOP-led state House of Representatives. They include abuse of public trust, unfitness for office and bribery.

The impeachment accuses Paxton of using his office to help Paul over his unproven claims of an elaborate conspiracy to steal $200 million of the developer’s properties. The bribery counts say that in return the developer employed a woman with whom Paxton had an expensive renovations to the attorney general’s million-dollar Austin home.

Paxton’s lawyers sought to rebut the latter claim this week by releasing a bank statement that included a 2020 wire transfer purportedly showing Paxton, and not a donor, paying more than $120,000 for a home renovation. But the document raised new questions about the men’s dealings.

The wire transfer was dated Oct. 1, 2020 — the same day Paxton’s deputies signed a letter informing the head 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 corporation and court records show.

Paul has faced numerous lawsuits from creditors and business partners over the years, with several of his companies filing for bankruptcy or being placed under the supervision of court-appointed overseers. Last year, one of those so-called receivers wrote in a report that Cupertino Builders was used for “fraudulent transfers” from Paul’s business.

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

The Senate will set its own rules for a trial that has little precedent, given that Paxton is just the third sitting official in Texas history to be impeached. The proceeding is set begin no later than Aug. 28.

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