AUSTIN (KXAN/ABJ) — The FBI raided the offices of World Class Holdings Wednesday, 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 at 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.
KXAN and Austin Business Journal reporters also visited the office at Ninth and Lavaca, the historic Hirshfeld House, and found FBI agents inside.
Additionally, the FBI searched an Austin home owned by Paul. Neighbors said the agents showed up in the morning. By 5 p.m., they were still loading up a U-Haul truck with boxes.
The FBI said it had not made any arrests Wednesday.
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 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.
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. By 2017, World Class had $1.2 billion in assets, according to a 2017 Forbes article that also estimated Paul’s net worth at $800 million.
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.
Previous legal troubles involving World Class Holdings
Over the years, Paul faced legal troubles not just in Austin, but in Dallas and Houston as well.
Less than two months ago, the Hooper Family Trust filed a lawsuit in Dallas County against Nate Paul and his company. It claimed Paul lied about a property to get the trust to invest.
Last year, the Mitte Foundation in Austin sued World Class, and several years prior, the company was sued in Harris County by an investor who said financial reports from World Class were late or never shared.
- Read more about the Mitte Foundation lawsuit here.
KXAN also found contractors that did business with Paul’s company didn’t get paid on time. We discovered multiple claims for liens filed in Travis County against World Class. The claims said the company owed the contractors tens of thousands of dollars.
Back in 2014, Paul was also sued by a group of employees a RIO, a nightclub downtown. They accused Paul of “essentially stealing their tips in blatant violations of federal wage laws.” That case was dismissed.