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AUSTIN – KXAN reports that real estate developer Nate Paul agreed to plead guilty Wednesday to one charge of making false statements to a lending institution. The plea ends his 18-month federal bank and wire fraud case related to his work as head of World Class, according to court proceedings.

The government recommended no more than six months in prison, five years additional years of supervised release and a maximum $1 million fine. The sentence is not yet set.

The case is being sent to the US Probation Office for a pre-sentencing evaluation. If the plea deal is accepted, the sentence is capped at 6 months. The remaining 11 counts against Paul will be dismissed, according to U.S. Magistrate Judge Dustin Howell, who oversaw the plea.

Paul is allowed to remain out of custody, and the plea agreement remains sealed.

Paul potentially faced decades in prison, and his jury trial was set to begin Feb. 18.

Federal authorities first indicted Paul in June 2023 on eight counts of bank fraud. He was accused of making false statements to lenders to obtain over $172 million in loans. In November that year, prosecutors added four additional wire fraud charges in a superseding indictment.

For each of the eight bank fraud counts, Paul faced up 30 years in prison and a $1 million fine. The four wire fraud counts each carried a maximum 20 years in prison and $250,000 fine, according to the U.S. Department of Justice.

The plea agreement ends the uncertainty surrounding Paul’s legal troubles, and it underscores his fall from the top of Austin’s commercial real estate scene – where the 37-year-old was a powerhouse with numerous multi-million-dollar properties peppered across town.

Paul was the chief of World Class Holdings, a company with myriad sub-businesses and, at one point, over $1 billion in assets across 17 states, according to a Forbes report.

Cracks in Paul’s real estate empire became visible after a 2019 FBI raid on his home and business headquarters. Many of his World Class companies have since filed for bankruptcy. Paul also became entangled in allegations of abuse of office against Texas Attorney General Ken Paxton.
Who is Nate Paul — the Austin real estate investor charged with 8 federal counts

The plea agreement announced Wednesday comes days after Senior U.S. District Judge David Ezra denied a motion for continuance sought jointly by the defense and prosecutors to push the trial date from mid-February to mid-April. At a Jan. 8 hearing, Ezra said the case had “gone on way too long,” and both sides had enough time to prepare for a February trial.

Also at the Jan. 8 hearing, a court clerk said both the defense and government were “simultaneously talking about a plea agreement.” That was the first public mention of a possible plea deal. One of Paul’s attorneys previously told KXAN they were taking the case to trial, and Paul hired a team of top-flight defense attorneys, including several from Washington D.C. based firm Williams & Connolly.

The plea agreement spares Paul from a trial that would have stretched several weeks. The government notified the court in January it expected its portion of the trial to take 10 to 14 days – not including the defense’s case and rebuttal.
Paxton connection

Separate from the federal case, Paul was ordered to serve a 10-day jail sentence in November for contempt of court for perjury and violating an injunction in a civil lawsuit against a charity, according to records from Travis County District Court, where the case was being handled.

That civil case linked Paul to allegations against Paxton for disregarding his official duty by using his office to assist Paul in the lawsuit. Paxton was impeached over that allegation, among others, including misusing his power to have legal opinions written to help Paul avoid foreclosures and by obtaining previously undisclosed information to assist Paul, according to the articles of impeachment.

Paxton was ultimately acquitted on all the counts against him in a State Senate trial in 2023.

AUSTIN – KXAN reports that the Better Business Bureau reported on Monday it analyzed over 6,000 “BBB scam tracker” reports by Texans throughout 2024, according to a BBB press release. The analysis revealed Texans reported losing over $10 million to fraud, setting an all-time high since the “BBB scam tracker” was created in 2014. The BBB said that one-third of reports included an average loss of $150, a slightly higher average loss than in 2023.

Consumers between 45 years old and 54 years old were among those that reported the highest total losses at 2.8 million. Right behind that age group were consumers between 55 years old and 64 years old at 2.7 million lost, according to the press release. “Over the past few years, our data is showing a sharp increase in scam activity resulting in millions of dollars being lost,” said Heather Massey, vice president of communications and community relations at Better Business Bureau serving the Heart of Texas. “In just two years, scam reports have doubled, and losses have increased by more than 430 percent.” The BBB revealed the top five fraudulent reports that impacted Texans in 2024. Investment and cryptocurrency fraudulent reports were the costliest for Texans in 2024, the total loss was $3.1 million, according to the nonprofit organization.

NASHVILLE, Tenn. (AP) — A panel of appeals judges has ruled that Tennessee can begin enforcing a law that requires pornographic websites to verify their visitors’ age as the First Amendment debate rises to the U.S. Supreme Court this week for oral arguments over a similar Texas law.

On Monday, the 6th U.S. Circuit Court of Appeals panel ruled 3-0 that Tennessee’s law can take effect while a legal challenge continues. A district court judge had largely temporarily blocked the law from kicking in on Jan. 1, citing free speech protections for adults and saying the law would be ineffective at shielding minors from harmful content.

The Free Speech Coalition, an adult entertainment trade group, sued over Tennessee’s law and those in a half-dozen other states, including Texas. Some 19 states have passed similar laws, the coalition says.

The 6th Circuit panel wrote that the district judge didn’t show that any potentially unconstitutional aspects of Tennessee’s law would outweigh its constitutional uses. It described the law’s goals as “to protect children from the devastating effects of easy access to on-demand pornography.”

Other appeals courts have reversed lower court decisions that had blocked similar laws in Texas and Indiana, the panel wrote. The Supreme Court declined to halt Texas’ law in April while a legal challenge by the Free Speech Coalition continues, with oral arguments Wednesday.

“We see no reason to keep Tennessee’s law on ice while Texas and Indiana may enforce theirs (against at least one of the same Plaintiffs), especially when the Supreme Court will soon offer guidance on the standard of review we should apply,” the 6th Circuit ruling says.

After the decision, the website Pornhub began blocking access in Tennessee. The website had already halted access in 16 other states with verification requirements it has called “ineffective, haphazard, and dangerous” and not properly enforced, according to its parent company, Aylo. The company advocates for age verification on individual devices.

Tennessee’s law would require porn websites to verify visitors are at least 18 years old, threatening felony penalties and possible civil liability for violators running the sites. They could match a photo to someone’s ID, or use certain “public or private transactional data” to prove someone’s age. Website leaders could not retain personally identifying information and would have to keep anonymized data.

Age verification would be required if one-third of a website’s content is considered harmful to minors under state standards.

The Free Speech Coalition has argued the law would be ineffective, unconstitutional and force people to transfer sensitive information.

Meanwhile on Monday, Kansas Attorney General Kris Kobach sued Seattle-based SARJ LLC, alleging the company is violating Kansas’ law by operating 13 pornographic websites without “age-gating technology” ensuring visitors are 18 or older.

The consumer protection lawsuit requests potentially millions of dollars in damages — up to $10,000 for each time someone in Kansas accessed one of the websites, and up to $10,000 for each day the company was not in compliance with the law.

In blocking Tennessee’s law, U.S. District Judge Sheryl Lipman in Memphis wrote that Tennessee’s requirement would not prevent minors from accessing adult sites using VPNs, or virtual private networks, that mask a user’s location. The law would also not stop them from viewing pornographic material on dark corners of the internet — or via social media sites, which would likely be shielded by the one-third content threshold, Lipman said.

The judge said the law’s impact could be overly broad, potentially affecting other plaintiffs such as an online educational platform focused on sexual wellness. She also noted that Tennessee’s definition of “content harmful to minors” extends to include text.

Lipman is an appointee of former President Barack Obama. Former President George W. Bush appointed two of the 6th Circuit judges. President-elect Donald Trump appointed the third.

Tennessee Attorney General Jonathan Skrmetti, who applauded the ruling, noted that the age verification requirement passed unanimously in the Republican-supermajority Legislature.

“As the Court of Appeals noted, this law seeks to stem the flow of toxic content to kids and keep adult websites adults-only,” Skrmetti said in an emailed statement.

Similar Florida and South Carolina laws kicked in Jan. 1. Another age verification law takes effect in July in Georgia.

WASHINGTON (AP) — While Republican states were working to limit school history lessons and ban transgender athletes, President Joe Biden’s education chief says he was focused on what matters: putting more social workers in schools, expanding summer school and building a pipeline of new teachers.

In an interview during his last days in office, Education Secretary Miguel Cardona said he sought distance from the battles waged by Republican governors who he says were out to make a name for themselves.

“I’m not going to get distracted by culture wars,” Cardona said. “It’s nonsense, and I think the people that spew it, they make a fool of themselves. I don’t need to help them.”

Cardona said he wants to be remembered for “substance, not sensationalism.” He helped schools reopen after the COVID-19 pandemic, he said. He oversaw a historic infusion of federal aid to America’s schools. Under his watch, more than 5 million Americans got student loan cancellation.

Yet his time in office will also be remembered for the politics swirling around him. Conservatives and some experts now say COVID school reopenings were too slow, pointing to ongoing academic shortfalls and concerning trends in youth mental health. Even after the pandemic, education became a battleground, as conservatives rallied to rid what some see as “wokeness” being promoted by educators in the classroom. Republican states passed laws limiting what schools can teach about race and sexuality, and many adopted laws and rules banning transgender athletes in school sports.

Cardona said he did what he could to push back. The Education Department investigated civil rights complaints in cases of alleged discrimination. He issued what was seen as a landmark rule expanding Title IX, a sex-discrimination statute, to protect LGBTQ+ students.

But he ran up against the limits of his authority. A federal judge scrapped the Title IX rule, and Republican states ignored his pleas to promote diversity in education.

“We saw in this country what I think is a step backwards in terms of student rights,” he said. “The reality is, the federal government has a limited role in state policy.”

Cardona, 49, came into office after a rapid rise in the world of education. The son of Puerto Ricans, he spent years as a fourth-grade teacher, a principal and a district administrator before becoming Connecticut’s education chief. Biden had promised to appoint a secretary with teaching experience as a foil to Trump’s first education secretary, pro-school-choice philanthropist Betsy DeVos.

Early in his tenure, Cardona tried to use the bully pulpit to bring Republican governors in line. In letters to the governors of Florida and Texas, Cardona sparred over mask mandates and COVID testing. He says he changed course after finding that’s what they wanted — a national platform to win attention before the 2024 presidential election.

He said it wasn’t a good use of his time “going tit-for-tat with a governor who’s hell-bent on being the most anti-Biden so that he could make it on the presidential ballot.”

Messages left with the offices of Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott were not immediately answered.

The political fights extended to the courts, where Republican states successfully killed some of Biden’s signature education plans, including widespread student loan cancellation, a more generous student loan repayment plan, and his Title IX expansion.

Other plans withered after failing to gain support in Congress, including a push for free community college.

Yet Cardona says there were more victories than losses. Under Biden, the maximum Pell Grant for low-income college students saw its biggest increase in a decade. More than 1 million public workers got student loans canceled after the Education Department retooled a troubled program. New legislation allowed schools to hire 16,000 mental health professionals.

“What we did is going to have a tremendous impact in our schools,” he said. “When you have more school social workers, psychologists, more reading teachers, more after-school programs, more summer programs than in the history of our country, there’s 50 million kids out there that are going to benefit from that.”

Cardona sought to play down what critics say was one of the lowest points of his tenure — a bungled overhaul of the federal financial aid form known as FAFSA. Congress ordered the Education Department to simplify the notoriously complex form, but a series of glitches led to delays in college financial aid decisions for months.

Critics called it a crisis and predicted that the frustration would deter some students from going to college at all. Cardona disputed the idea, citing new data from the National Student Clearinghouse finding that enrollment of college freshmen increased this fall.

Cardona called the FAFSA update a trying time that “really tested us.”

“And in my opinion,” he said, “we passed the test.”

In a farewell speech earlier Tuesday, Cardona urged his departing colleagues not to despair, even as they wonder if the next administration will undo policies and slash budgets. Cardona said he’s leaving with hope “because I never, ever bet against our nation’s teachers and students.”

They are the ones “who will write the next chapter, who will decide the fate of public education,” he said. “There’s no one education secretary or president that does that, and no one leader can break our resolve.”