Exclusive: Texas AG Ken Paxton could see criminal charges dropped in deal with prosecutors
by Texas Attorney General Ken Paxton is nearing a resolution to the 9-year-old securities fraud charges that have dogged his tenure as the state’s top attorney through a special agreement with prosecutors, the American-Statesman has learned.
Under a draft agreement, prosecutors would dismiss felony charges against Paxton if he successfully completes the terms of the deal, according to three sources familiar with the negotiations.
The sources, with knowledge of the discussions between Paxton’s legal team and prosecutor Brian Wice, a Houston attorney appointed to handle the case, said the terms could include community service, advanced legal education classes and a six-figure restitution, among other possible punishment. Two sources said the restitution could be between $300,000 and $400,000.
Under the conditions, Paxton likely would not have to formally enter a plea but must not violate any law for an extended period. Paxton, a 61-year-old Republican, could have faced up to 99 years in prison if convicted.
Such agreements generally do not require a judge’s approval, underscoring the wide authority that Texas prosecutors have to resolve cases.
The sources could not be named because they are not authorized to speak about the deal.
Contacted Friday, Wice declined to comment.
Paxton attorney Dan Cogdell said in a text message to the Statesman and KVUE-TV that “I’m not going to comment on something that hasn’t happened and may well not happen.”
Particularly in urban Texas counties, felony cases are frequently worked out through similar agreements, sometimes referred to as “conditional dismissals,” “pretrial intervention” or “deferred prosecution agreements” that are outside the traditional path of a case and keep a conviction off a defendant’s record without approval from a judge.
Wice and Cogdell have been working in recent weeks to resolve the charges before an April 15 trial date in Harris County state District Court in Houston. This week, Wice announced that a final pretrial hearing that was set for this past Wednesday had been rescheduled for Tuesday.
It is expected that the attorneys will inform District Judge Andrea Beall of the agreement and the resolution to the case at the Tuesday hearing.
The agreement would allow Paxton to avoid a public airing of facts and evidence against him in the legal saga that has seen fights over the pay of special prosecutors, jurisdiction and other disputes that have prolonged the matter. The resolution of the case also would not affect Paxton’s law license.
It is unclear what prompted both sides to attempt to resolve the case at this stage.
The felony securities fraud case has clouded Paxton’s rise from the Legislature to Texas’ leading state attorney, as he has faced near constant criticism for the charges tied to accusations of defrauding investors and soliciting clients for an investment firm without having had a license to do so, which were first levied by a Collin County grand jury nearly a decade ago.
Over the course of the case that would have entered its ninth year in July, Paxton and his legal team have fought the accusations and prevented the proceeding from advancing quickly by successfully moving the case to Harris County, seeking different presiding judges and filing dozens of motions over legal technicalities and special prosecutor salaries.
More:Paxton finds success in Court of Criminal Appeals races, unseating incumbents in a sweep
In February, Paxton’s team filed a motion to toss the case entirely on account of the lengthy delays they viewed to be unconstitutional. While the motion was rejected by Beall, attorney Kent Schaffer stepped away after more than eight years on the case because the prosecutors’ work had largely gone unpaid, which was compounded by what Wice described as a disagreement over whether to proceed to trial.
Paxton faces two first-degree felonies for failing to disclose to potential investors that he was being paid by a Dallas-area tech startup, Servergy, to recruit them to buy shares in the company. Paxton, according to court records, was in line to receive payments of $100,000 in stock compensation for securing each of the two new investors.
Paxton also faced a third degree-felony charge for failing to register with the Texas State Securities Board as part of an arrangement dating back to 2004 in which Paxton, a newly elected member of the Texas House and a practicing lawyer at the time, recommended his clients invest with Mowery Capital Investments in exchange for receiving part of the associated fees for the new accounts.
However, the finale of Paxton’s securities fraud case does not conclude all his legal troubles. A federal probe that began in 2020 – based on whistleblower complaints that Paxton had abused his authority and curried favor in a mutually beneficial relationship with former Austin real estate developer Nate Paul – is ongoing after a grand jury was impaneled in San Antonio last summer.
More:Austin real estate developer Nate Paul must serve 10 days in jail, high court rules
Additionally, a dispute with four former agency employees turned whistleblowers — who were involved in bringing their concerns to the Texas House and forming the basis for the May 27 vote overwhelmingly to impeach Paxton on 20 charges, including bribery and abuse of office — is still being considered in front of the state Supreme Court after the former employees opposed Paxton’s efforts to have a final judgment entered in the wrongful termination lawsuit.
Paxton also faces an active complaint before the state Supreme Court from the Commission for Lawyer Discipline on behalf of the State Bar of Texas based on his effort to propagate concern over the outcome of the 2020 presidential election.
Despite the judicial headwinds, Paxton has found political success after his acquittal and reinstatement following a mostly partisan vote by the Senate to dismiss the House impeachment charges. In the aftermath of the September Senate trial, Paxton vowed revenge against members of the House who voted to impeach him, and the GOP primary election this month saw several incumbents beaten by candidates he endorsed while others were forced into runoff elections scheduled for May.
Statesman reporter Bayliss Wagner contributed to this report.
