Texas AG Ken Paxton enters deal to resolve securities fraud charges
Texas AG Ken Paxton enters deal to resolve securities fraud charges

HOUSTON — Texas Attorney General Ken Paxton and state prosecutors have reached a deal to resolve his 9-year-old securities fraud charges, attorneys announced at a hearing in Harris County Circuit Court Tuesday morning.

The 18-month plea agreement will allow Paxton to walk away from the long-running case without charges if he meets the terms of the deal, which include serving 100 hours of community service in Collin County, enrolling in 15 hours of legal ethics training and paying $271,000 in full restitution to investors who put money into a Dallas-area tech startup based on Paxton’s demands, according to terms released Tuesday morning.

“I am grateful to have reached this settlement, to put this matter behind me so I can get back to work representing the state of Texas,” Paxton said in a statement.

“The state reached out to us and General Paxton is happy to agree to the terms of the dismissal,” said Dan Cogdell, Paxton’s attorney. “The settlement allows him to return to represent the citizens of the state of Texas.” But let me be clear, at no point was he going to take a plea deal or admit to behavior that simply didn’t happen. The agreement does not allow for any wrongdoing on Ken’s part because there was no wrongdoing on his part.”

The charges — three felonies indicted by a Collin County grand jury in 2015 — stem from allegations that Paxton solicited the investments without disclosing that Servergy paid him $100,000 in company stock for each pitch he referred.

Brian Weiss, the special prosecutor in the case, said the state was “confident that a Harris County jury would have found our proof beyond a reasonable doubt,” although he cautioned that three outcomes could have been reached “and two are bad — unsettled jury or innocent.”

It took nine years to resolve the case because “this case was a perfect storm of everything that could have derailed and delayed the prosecution,” Weiss said at a news conference Tuesday morning, citing the devastation of Hurricane Harvey in Houston that caused the court to be closed for 2017 and the COVID-19 Pandemic in 2020

Weiss said there was also a year of pretrial litigation filed by Paxton, and, he said, the previous judges in the case “didn’t do what we pay Harris County judges to do: rule on the motions in a timely manner. Her predecessors refused to do that.”

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The deal was made before the April 15 trial date

A representative for Paxton’s alleged victims said Tuesday they were satisfied with the outcome.

“The criminal justice system makes every promise to every defendant — including Mr. Paxton — a fair trial that leads to a reliable outcome, and we believe we have done just that,” Weiss said, adding that this resolution makes victims and their estates whole. . “Victims are rarely saved,” he said.

The American-Statesman, part of the USA TODAY Network, exclusively reported Friday that Weiss and Paxton’s legal team are negotiating how to resolve the case ahead of the April 15 District Court trial date.

Explaining why Paxton agreed to a pretrial diversion agreement, Cogdell said at a press conference after the deal was announced that “you don’t go to court to prove your innocence” and “you never know what 12 strangers are going to do if you try a case anywhere. “

In his 42 years as a lawyer, Cogdell said he has never rejected a pretrial diversion agreement, “and I’m damn sure not going to do that representing the Texas attorney general.”

Over the years, the case has seen jurisdictional battles, a move from its original location in Collin County to Harris County and fights over pay for Weiss and another prosecutor working on the case. Paxton also filed a series of actions that further prolonged the case.

Paxton still faces a federal investigation

The resolution of that case, however, comes as Paxton remains under federal investigation in a separate case over allegations made by senior aides in his office accusing the attorney general of abusing his position to help Austin real estate developer Nate Paul. who was the target of an FBI investigation at the time.

Those allegations prompted the Texas House to launch its own investigation into whistleblower complaints and eventually vote overwhelmingly to impeach Paxton on 20 counts, including bribery and abuse of office. The impeachment inquiry was then sent to the state Senate for trial. In September, senators, mostly along party lines, acquitted Paxton on all charges.

Those allegations also led to a lawsuit filed by whistleblowers who claimed they were fired by Paxton after complaining to the FBI about his behavior, which was tentatively settled for $3.3 million but remains unresolved after with the House last year refusing to pay for it. The case is currently before the state Supreme Court.

Lt. Gov. Dan Patrick, a Paxton ally who as Senate leader presided over the attorney general’s impeachment trial, said in an X post, “The court’s actions in Houston underscored the lack of any real evidence — the prosecution was wise to save themselves the shame of defeat in the courtroom.”

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