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FBI arrests Texas businessman in connection with AG Ken Paxton’s impeachment

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AUSTIN, Texas (AP) – The FBI on Thursday arrested a businessman who was at the center of the scandal that led to the case of Texas Attorney General Ken Paxton historic impeachmenta move that comes amid fresh questions about the men’s deals raised by financial filings released by the Republican’s attorneys to clear him of bribery charges.

Nate Paul, 36, was arrested by federal officers and taken to an Austin jail in the afternoon, records from the Travis County Sheriff’s Office show. It wasn’t immediately clear what charges led to his arrest, but records showed he was being held in a federal prison for a felony.

Paul’s arrest follows years of a federal investigation into the Austin real estate developer – an investigation in which Paxton involved his office and which set off a chain of events that eventually led to his impeachment last month.

Paul’s attorneys did not immediately respond to requests for comment. One of Paxton’s defense attorneys, Dan Cogdell, said he had no further information about the arrest. The FBI declined to comment and a spokesman for federal prosecutors in West Texas did not respond to inquiries.

FBI agents investigating Paul’s troubled real estate empire search his Austin Offices and palatial home in 2019. Seven of them next year Paxton The chief deputies of the attorney general reported allegations of bribery and abuse of his office to help Paul to the FBI through, among other things Hire an outside attorney to verify the developer’s allegations of federal agent misconduct.

The allegations by Paxton’s associates prompted a separate FBI investigation by the Attorney General, which is ongoing and central to the charges, which were passed overwhelmingly the GOP-led state House of Representatives.

On Wednesday, the Paxton defense team showed a full room full of journalists a bank statement that contained a 2020 remittance purportedly showing that he and no donor paid more than $120,000 for a home renovation.

The referral is dated October 1, 2020 — the same day, Paxton’s deputies signed a letter informing the Chief Human Resources Officer at the Texas Attorney General’s Office that they had reported Paxton to the FBI.

The $121,000 payment went to Cupertino Builders, whose manager was an employee of Paul, according to court filings and a state company.

The company’s incorporation as a Texas corporation occurred more than three weeks after the transaction. In April of the same year, a company of the same name was founded in Delaware, but public records there do not reveal who is behind it.

Last year, a court-appointed supervisor for some of Paul’s companies wrote in a report that Cupertino Builders was used for “fraudulent transfers” from his company to Narsimha Raju Sagiraju, who was convicted of fraud in California in 2016. In the report, Sagiraju was described as Paul’s company “friend.”

Paul, who also employed a woman Paxton was familiar with having an extramarital affairHe has denied bribing Paxton. In a statement, Paul described Sagiraju as an “independent contractor” and said he couldn’t remember how they met.

The timing of the payment – and who was being paid for the renovations to Paxton’s Austin home – was not publicly known before his new legal team held a news conference on Wednesday, where they displayed financial documents on a screen while also criticizing the impeachment. They were first reported by The Wall Street Journal.

Tony Buzbee, A prominent Houston attorney who was hired by Paxton over the weekend and chaired the press conference, said by email Thursday that the receipts “conclusively show” Paxton paid for the repairs. He did not address questions about the timing of the payments or about Cupertino Builders.

“Without any evidence, the politicians leading this sham impeachment falsely accused General Paxton of failing to pay for repairs to his home. That’s a lie,” Buzbee said.

Since becoming only the third sitting official in Texas history to face impeachment, Paxton has attacked the process as politically motivated and rushed, saying he never had an opportunity in the House of Representatives to refute the allegations.

“We have the receipts,” Buzbee told reporters Wednesday as the documents flashed on screen. “That’s the kind of evidence we tried to give them when we found out this stupidity was going on.”

Paxton will be temporarily suspended pending the outcome of a trial before the Texas Senate, which is scheduled to begin no later than August 28. The “jury” will consist of members of the 31-seat Senate; One of them, Paxton’s wife, Senator Angela Paxton, has not said if she will retire.

The Paxtons bought the Austin home in 2018. When it was being remodeled two years later, former Paxton employees claimed in court documents that Paul was “involved in the work.”

Among the 20 articles of the impeachment trial is an allegation that Paxton used the power of his office to assist Paul with unsubstantiated allegations of an elaborate conspiracy to steal $200 million in property from the developer. The FBI searched Paul’s home in 2019, but he was not charged and his attorneys denied wrongdoing.

The city has no documents about building permits from the time of the renovation measures. Another Austin contractor — not Cupertino Builders — received a federal grand jury subpoena in 2021 for paperwork related to work on Paxton’s home that began in January 2020.

Cupertino Builders was formed in October 2020 and dissolved less than two years later, records from the Texas company show. His manager was Sagiraju, who in testimony to an unrelated case said he had done “consulting work” for Paul’s company and had an email address at Paul’s company.

According to a transcript of the statement, Sagiraju admitted to serving time in California for securities fraud and grand larceny before moving to Austin. He said he was first introduced to Paul before his sentence by a mutual friend and they later did “a few projects” together.

A lawyer for Sagiraju did not immediately respond to requests for comment.

Paxton was separately charged with securities fraud in 2015 but has yet to appear in court. ___ Bleiberg reported from Dallas. Associated Press journalists Adam Kealoha Causey in Dallas and Derek Karikari in New York contributed.

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