Developer linked to Texas Attorney General Ken Paxton Charged Judge Others of Fraud – NBC 5 Dallas-Fort Worth

An Austin real estate developer at the center of recent allegations against Texas Attorney General Ken Paxton has called for an investigation into his unsubstantiated claims that other businessmen have an elaborate plot to steal $ 200 million from its properties with the help of a federal judge.

The Associated Press has obtained a copy of an undated complaint from Nate Paul, which reveals the developer’s allegations focused on his business to a previously unknown extent and raises new questions about the Republican Attorney General’s handling of allegations made by a wealthy donor.

After Paxton hired an outside attorney to investigate Paul’s allegations, his seven senior deputies reported the attorney general to the FBI for alleged abuse of power, bribery and other crimes related to his relationship with Paul.

In his complaint to prosecutors in Austin, Paul said the owner of a chain of Texas auto dealers conspired with lawyers, investors and others to seize his assets. The developer accuses 11 people of a complex fraud allegedly designed to include the judge and another court-appointed official facilitating a “rigged auction.”

The signed 10-page “Inquiry Request” is one of two from Paul that were referred to Paxton’s office, sparking a remarkable revolt from the Republican’s staff.

Paul’s complaint is largely based on things he says he heard secondhand. Many of these defendants are in business and legal battles with Paul, and some have ridiculed his claims as ridiculous. None have been charged with crimes.

A retired FBI agent who investigated the complaint called the plot a “lottery winner.”

“I’m sure these allegations are all a bunch of utter nonsense,” said Keith Byers, a Texas attorney who previously oversaw the FBI’s public corruption cases. “What is unfortunate is that the good reputation of a seemingly trustworthy judge is tainted by these outlandish and outlandish allegations.”

Paxton dropped the case after it went public. He denied any wrongdoing and blamed “the rogue employees and their false allegations.”

His staff’s accusations, however, fueled new calls for the resignation of an attorney general who has spent most of his tenure maintaining his innocence in the face of unrelated criminal charges.

Paxton said he hired Houston criminal defense attorney Brandon Cammack to investigate allegations of wrongdoing by Paul by the FBI, which raided the developer’s home and office last year. But the attorney general’s office did not respond to questions about the fraud complaint.

Cammack declined to discuss the substance of his work for Paxton. But a person familiar with the investigation said Cammack referred to the second complaint in an invoice for his work. The person spoke on condition of anonymity, fearing the person would face retaliation.

The fraud complaint appears to explain why Cammack served subpoenas on people in legal and business disputes with Paul.

The developer gave Paxton a $ 25,000 contribution to the campaign in 2018, but the full nature of their relationship is unclear.

Paul alleges that auto dealership owner Bryan Hardeman and his son planned to exploit $ 43 million in debt owed by Paul’s businesses to seize $ 200 million of the developer’s properties.

Hardeman’s “grand plan” was to buy the debt and consolidate it into a bankruptcy case before a judge with an “illegal side deal,” the complaint says. The judge would then force Paul’s companies into the hands of a court-appointed receiver also under the deal. Finally, the receiver would sell the properties in a rigged auction by Hardeman so that he could earn and bring in over $ 150 million.

Paul said he got wind of the plot in mid-September after Hardeman tried to recruit one of the developer’s investors, Alan Nalle.

Nalle said Hardeman had approached him to buy a debt that Nalle holds on one of Paul’s properties, but questioned qualifying this as planned fraud.

“I guess you could do it, but that just seems overkill to me,” Nalle said in a brief interview.

Hardeman immediately responded to messages asking for comment left with his lawyer and his office. In an Oct. 22 deposition, Hardeman said he never contacted the judge or the receiver, according to a partial transcript filed in another case involving Paul.

Judge Tony Davis is overseeing several bankruptcy cases involving Paul’s companies. A clerk said in an email: “We do not comment on matters involving parties or cases pending before us.”

An attorney for the receiver, Gregory Milligan, said: “The allegations that my client is involved in a conspiracy of any kind are ludicrous and completely unfounded.”

Paul’s attorney, Michael Wynne, did not immediately respond to questions sent by email.

Travis County District Attorney Margaret Moore said Paxton approached his office to arrange a meeting with Paul and his attorney and local prosecutors referred Paul’s two subsequent complaints to the attorney general’s office.

The first complaint was sent to Paxton’s office because it involved allegations against state and federal investigators, who would normally deal with such a case. The second was sent to Cammack because he was already investigating Paul’s allegations and dealing with a federal judge, Moore told AP.

The person familiar with the attorney general’s office investigation said Paxton’s senior assistants did not see the second complaint and only learned about it through Cammack’s bill.

Moore said she did not personally examine Paul’s claims until after the allegations by Paxton staff became public. She described the two inquiries as “extremely unusual”.

Moore declined to say if his office was investigating anyone involved.

First Deputy Attorney General Ryan Bangert resigned from Paxton’s office on Wednesday. With his departure, the seven lawyers who accused Paxton of crimes resigned, were placed on leave or fired.

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