Hello Komountain It seems non-standard to me. I would always say "despite the fact that". But it wouldn't surprise me if "despite that S V" were the older form.
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AnonymousI would never use the cliche that seems to be floating around "the fact that" which is completely unnecessary and make you appear like an amateur.This is an old thread (2005). Perhaps your search brought you into the middle of it. (That often happens.)