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  #1  
Old Posted Aug 14, 2019, 7:07 PM
We vs us We vs us is offline
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Smile World Class Capital Group

Holy wow. FBI just raided Nate Paul.

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The FBI on Aug. 14 raided the offices of World Class Holdings, a high-flying real estate firm that has amassed a head-turning amount of property over the past decade.

Federal investigators visited the offices of Nate Paul's commercial real estate company near Ninth and Lavaca streets, according to multiple sources, including one with inside knowledge of World Class' business. These sources asked not to be named to discuss the sensitive topic. The FBI also visited Frost Bank Tower, where World Class had office space until May.

Austin Business Journal reporters also visited the office at Ninth and Lavaca, the historic Hirshfeld House and Cottage, and found FBI agents inside.

FBI Special Agent Michelle Lee confirmed that the agency conducted a law enforcement operation in the vicinity of Congress Avenue and Fourth Street on the morning of Aug. 14. The Frost Bank Tower address is 401 Congress Ave. The spokeswoman told KXAN News she could not discuss what the FBI was doing but said there was no immediate threat to the public.

Daryl Fields, a spokesman for the U.S. Attorney's office in San Antonio, said he was "aware of what's going on" in Austin but declined to comment. Sources told KXAN a federal investigation has been going on for at least a year.

Multiple sources also told KXAN News that turnover has been high at World Class in the past year, including the departures of at least two senior executives in the last eight months.

Paul did not respond to an ABJ request for comment.

Paul is a lightning rod on the real estate scene. The native Austinite founded World Class in 2007 and got his start investing in self-storage facilities, investing in millions of dollars worth of real estate.

He has since invested in high-profile properties such as the IHOP restaurant site downtown at the corner of Cesar Chavez Street and the I-35 frontage road and the old Carmelo's restaurant site at 504 E. Fifth St. In February, Paul told ABJ he controlled 1.2 million square feet in Austin spread across buildings from downtown — including the historic Phillips Building near Fifth and Brazos streets and the Capital Grille building on West Fourth Street — to the urban periphery.

Paul has run into some financial troubles recently. A prominent site he owns in downtown Austin, 99 Trinity St. at the intersection of Cesar Chavez, was nearly foreclosed on in May.

This is a developing story and will be updated.
https://www.bizjournals.com/austin/n...in-austin.html
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  #2  
Old Posted Aug 14, 2019, 7:10 PM
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It's about damn time. I've felt that he's been up to shady practices for awhile now and especially recently. He isn't contributing to the community, rather taking away from it.
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  #3  
Old Posted Aug 14, 2019, 7:13 PM
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Damn. This is crazy.
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Old Posted Aug 14, 2019, 7:18 PM
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Good. Now maybe we can finally get a few of those properties developed he's been sitting on.

This comes to mind.

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  #5  
Old Posted Aug 14, 2019, 7:50 PM
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They should've kicked in the door with guns drawn and yelled: "GOT ANOTHER ONE!"
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  #6  
Old Posted Aug 14, 2019, 8:24 PM
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Originally Posted by zrx299 View Post
They should've kicked in the door with guns drawn and yelled: "GOT ANOTHER ONE!"



Man if only we had some juicy gossip about this...

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  #7  
Old Posted Aug 14, 2019, 8:35 PM
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If the FBI is involved with a real estate developer its probably money laundering or bribery.

Given that he doesn't build anything, I don't know who he needs to bribe.

Given that World Class Capital has financial problems and continues to engage in behavior that doesn't appear to have a financial benefit, I'm gonna go with money laundering as my wild speculation.
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  #8  
Old Posted Aug 14, 2019, 8:52 PM
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I recall I posted in the 99 Trinity site that it was odd he was using hard money lenders for purchasing property. I had a hunch something was shady based on that but figured it would be reckless to be explicit.

Since the FBI is involved and factoring in what other investors claimed in the Dallas lawsuit (that they didn't know the site they invested with him sold and hadn't seen any proceeds) makes me think Ponzi type scheme more than anything. Though that is really just rampant speculation on my part and it could be something as "simple" as bank fraud from being overleveraged.
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  #9  
Old Posted Aug 14, 2019, 8:52 PM
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Quote:
Originally Posted by StoOgE View Post
If the FBI is involved with a real estate developer its probably money laundering or bribery.

Given that he doesn't build anything, I don't know who he needs to bribe.

Given that World Class Capital has financial problems and continues to engage in behavior that doesn't appear to have a financial benefit, I'm gonna go with money laundering as my wild speculation.
I had wondered before if there might be some money laundering going on with WCC. It just didn't make sense how he was able to fund all of his purchases.

I'm not sure this would speed up the development of any of the sites WCC owns though. Due to this, they all might end up stuck in legal limbo for a while.
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  #10  
Old Posted Aug 14, 2019, 9:30 PM
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I'm going with tax issues and fraud.

He's had two investor lawsuits filed against him, and he settled out of court a few years ago for non-payment of employees in the restaurant (s?) he owns downtown. Not a good look.
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  #11  
Old Posted Aug 14, 2019, 10:07 PM
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Originally Posted by The ATX View Post
I'm going with tax issues and fraud.

He's had two investor lawsuits filed against him, and he settled out of court a few years ago for non-payment of employees in the restaurant (s?) he owns downtown. Not a good look.
Either way, this could become a good episode of "American Greed".
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  #12  
Old Posted Aug 15, 2019, 12:53 AM
zrx299 zrx299 is offline
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Got greedy and skimmed too much off the top of Rio/Lux/Pop's bar profits?

Another One caught! hahah
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  #13  
Old Posted Aug 15, 2019, 3:57 PM
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Originally Posted by paul78701 View Post
Either way, this could become a good episode of "American Greed".
Same with the bust of the Yassine brothers years ago.
https://www.texasmonthly.com/article...ezbollah-ties/
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  #14  
Old Posted Aug 15, 2019, 6:22 PM
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Quote:
Originally Posted by Dream Sequence View Post
I recall I posted in the 99 Trinity site that it was odd he was using hard money lenders for purchasing property. I had a hunch something was shady based on that but figured it would be reckless to be explicit.

Since the FBI is involved and factoring in what other investors claimed in the Dallas lawsuit (that they didn't know the site they invested with him sold and hadn't seen any proceeds) makes me think Ponzi type scheme more than anything. Though that is really just rampant speculation on my part and it could be something as "simple" as bank fraud from being overleveraged.
I've heard similar rumors from friends working in the financial industry that are knowledgeable about their business (and real estate development generally). Basically saying it's likely he was running a psuedo-ponzi scheme, paying investors back with other investors' money.
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Old Posted Aug 15, 2019, 7:28 PM
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Here's a nice summary of Nate's self-inflictions from the ABJ:

Quote:
World Class has had to defend itself in court multiple times recently. For example, the Austin-based Mitte Foundation sued World Class in December — the charitable foundation was a limited partner in the 99 Trinity property and alleged it wasn't given proper access to financial records. That case is ongoing. KXAN News reported on two other lawsuits, airing similar complaints about World Class, filed in Dallas and Harris counties.
World Class has also had more than 20 liens filed against it since 2013 by contractors alleging they were never paid for work. ABJ counted 21 liens filed in Travis County alone, with nine of those liens filed in 2019. In those 21 lien applications, contractors alleged they were owed nearly $1.7 million.
https://www.bizjournals.com/austin/n..._news_headline
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Old Posted Aug 16, 2019, 11:27 AM
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Jan Buchholz at the ATX Real Estate News has a long story about what she knows about Nate Paul along with a lot of former employee input. The guy is a basket case (if this is true):

Quote:
Dolan discovered soon after showing up at WCC that his new management position wasn’t much of a job. He had neither authority nor direction.

His biggest responsibilities included mowing the lawn at Paul’s mansion in the luxury Barton Creek neighborhood southwest of downtown. Dolan said he was particularly shocked the day his 2-year-old was recovering in the hospital from an emergency appendectomy and he was ordered to get over to Paul’s house to clip the grass.

In another instance, Dolan said he was told to show up at Paul’s luxury digs on a moment’s notice for an important emergency meeting.

“We got there and Nate wanted us to change all the light bulbs in his house,” Dolan said. “It was so ridiculous. There were boxes of light bulbs everywhere and he wanted us to change out all of them.”
https://atxrealestatenews.com/2019/0...-developments/
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  #17  
Old Posted Aug 16, 2019, 1:30 PM
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He's good at delegating if nothing else.
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  #18  
Old Posted Aug 16, 2019, 1:57 PM
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All that litigation is going to stretch on forever. And that means his property is going to just sit there until its over.

I'm glad it seems like he's finally getting his comeuppance, but we're still nowhere near the place where his stuff starts to get developed.
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  #19  
Old Posted Aug 16, 2019, 6:36 PM
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Quote:
Originally Posted by We vs us View Post
All that litigation is going to stretch on forever. And that means his property is going to just sit there until its over.

I'm glad it seems like he's finally getting his comeuppance, but we're still nowhere near the place where his stuff starts to get developed.
So how is this any different from his current business plan?
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  #20  
Old Posted Aug 16, 2019, 6:45 PM
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I would think that WCC would be better in it's own specific thread as opposed to off topic because off topic is general discussion that doesn't have to do with uban development, but I would argue that in this case it very much has to do with urban development (or lack thereof in their case). We are talking about a lot of real estate throught Downtown and other areas of the city. Considering that a lot more will be coming out and and a lot of discussion is forthcoming, I put forth on the table that WCC should have a dedicated thread, at least for the time being. Having it in Off Topic will likely make discussion of off topic subjects fragmented. Also people who don't normally look at the off topic thread but may be interested in the news about WCC would be able to find the discussion if it was in a dedicated thread.
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