Prosecutors have announced a deal with Texas Attorney General Ken Paxton to drop securities fraud charges that were pending against him for nearly a decade
Texas AG Ken Paxton reaches deal to end securities fraud charges after 9 yearsBy JUAN A. LOZANOAssociated PressThe Associated PressHOUSTON
HOUSTON (AP) — Texas Attorney General Ken Paxton on Tuesday agreed to pay nearly $300,000 in restitution under a deal to end criminal securities fraud charges that have shadowed the Republican for nearly a decade.
The announcement by special prosecutors in a Houston courtroom came less than three weeks before Paxton was set to stand trial on felony charges that could have led to a prison sentence. It was the closest Paxton — who was indicted in 2015 — has ever come to trial over accusations that he duped investors in a tech startup near Dallas.
Under the 18-month pre-trial agreement, the special prosecutors would drop three felony counts against Paxton, while he must pay full restitution to victims, and complete 100 hours of community service and 15 hours of legal ethics education.
Paxton was in the courtroom but made no comment other than affirming to state District Judge Andrea Beall that his signature was on the agreement.
If he had been convicted, Paxton could have been sentenced to life in prison. Paxton’s attorneys emphasized in a statement Tuesday that he made no admission of guilt under the agreement.
“This case has been pending literally longer than the Beatles were together — it was time to move on — and this proposal by the Special Prosecutors allows him to do just that,” said Don Cogdell, one of Paxton’s attorney.
The agreement with prosecutors, which lets Paxton remain in his elected position and doesn’t affect his law license, is another huge legal and political victory for one of the nation’s most visible Republican state attorney generals. The end of the case comes six months after Paxton was acquitted of corruption charges in an impeachment trial in the Texas Senate.
Brian Wice, a Houston attorney who was assigned as a special prosecutor in the case, described the deal as a victory that requires Paxton to repay investors, one of whom is a former GOP lawmaker who served with Paxton in the Texas Legislature.
Wice acknowledged the long arc of the case that shuffled between four different judges over the years, ping-ponged between courtrooms in Dallas and Houston, and at one point was slowed by the aftermath of Hurricane Harvey in 2017.
“This case, no pun intended, was a perfect storm of everything that could have derailed and delayed the prosecution,” Wice said.
The resolution of the securities fraud case furthers a dramatic reversal of political fortune for Paxton, who just a year ago appeared imperiled by both the criminal case and the threat of being removed from office after his top aides reported him to the FBI.
But Paxton has emerged emboldened. He waged war against dozens of GOP lawmakers who were part of the 2023 effort to impeach him, with his biggest target being state House Speaker Dade Phelan, who was forced into a May 28 runoff. Paxton’s revenge campaign also included helping defeat three Republican judges on the state Court of Criminal Appeals because they were part of a majority that stripped his office of the power to prosecute election fraud without permission from local district attorneys. He has not ruled out a primary challenge to Republican Sen. John Cornyn in 2026.
Paxton still faces legal troubles, however. A federal investigation has been probing some of the same charges presented in his impeachment.
He is also fighting efforts by former top aides to make him testify in a whistleblower civil lawsuit that also includes allegations central to the impeachment.
The securities fraud case has hung over Paxton nearly his entire time in statewide office. Yet Paxton, 61, has shown remarkable political resilience, maintaining and growing strong support among GOP activists on the state and national level, including from former President Donald Trump.
Paxton had been accused of defrauding investors in a Dallas-area tech company called Servergy by not disclosing that he was being paid by the company to recruit them. One of the people Paxton was accused of defrauding was former state Rep. Byron Cook.
Paxton was charged with two counts of securities fraud and one count of not being registered as an investment advisor.
Paxton was also charged in a federal civil complaint filed by the U.S. Securities and Exchange Commission over his work with Servergy. But a federal judge in March 2017 dismissed the complaint against Paxton. The person who recruited Paxton to work with Servergy, ex-company CEO William Mapp, was found liable by a jury for misleading investors and ordered to pay a civil penalty of $22,500. Mapp lost his job with Servergy and later had to work as an Uber driver to make ends meet, according to court documents.
Pre-trial disputes over trial location in the Dallas area or Houston and payment for the state’s special prosecutors delayed the securities fraud case against Paxton for years. Prosecutors argued most of those delays were caused by Paxton.
Paxton’s lawyers last month unsuccessfully sought to have the charges against him thrown out, arguing that the years of delay had violated his right to a speedy trial.
The fraud allegations were among the original 20 articles of impeachment. But that process was a political one. The criminal case posed a much more serious threat.
Paxton’s political opponents, most notably Republicans, had used the fraud charges against him in elections. But Paxton has twice been reelected as attorney general since his indictment, most recently in 2022.
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Associated Press writer Jim Vertuno in Austin, Texas contributed to this report.
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Follow Juan A. Lozano: https://twitter.com/juanlozano70
