Texas Attorney General Ken Paxton speaks at the Conservative Political Action Conference, CPAC 2024, at the National Harbor in Oxon Hill, Md., Friday, Feb. 23, 2024. Paxton survived impeachment and now seeks political retaliation. (AP Photo/Jose Luis Magana, File)
In an agreement that allows him to avoid a potentially long prison sentence if found guilty, Texas Attorney General Ken Paxton agreed to fulfill certain requirements in return for prosecutors dropping criminal securities fraud charges filed against him almost ten years ago.
These requirements include completing 100 hours of community service and 15 hours of legal ethics education courses. He is also obligated to pay $270,000 in restitution in order to have the charges dismissed and the case closed, which was set to go to trial on April 15.
Instead, as the Dallas Morning News reported, if he meets the terms within the next 18 months, the charges will not show up on his record. It's important to note: the agreement does not imply that Paxton has admitted guilt to the charges.
Paxton's lawyer, Dan Cogdell, emphasized this to the local outlet, stating that once the terms are completed, “the case will end without any admission on his part or any finding of guilt — because he’s not guilty of anything in this case.”
The charges, dating back to 2015, accused Paxton of committing dual felony counts of securities fraud and a single charge of failing to register as an investment adviser. He was accused of deceiving investors into investing in a Texas-based technology company called Servergy, without registering or disclosing that he would earn a commission on their investment.
Former Texas state Rep. Byron Cook and Joel Hochenberg, a now-deceased business owner, were among the investors. As part of the agreement reached on Tuesday, Paxton will pay the $270,000 to Cook and Hochenberg’s estates.
The state attorney general faced a substantial potential prison sentence if convicted of all charges: The maximum allowable sentence for first-degree securities fraud is 99 years.
Paxton is still being investigated for corruption in spite of this development.
As Law&Crime previously reported, former Deputy Attorney General for Criminal Justice Mark Penley, former Deputy Attorney General for Policy and Strategy Initiatives Blake Brickman, former Deputy Attorney General for Legal Counsel Ryan Vassar, and David Maxwell, the former director of the Office of Attorney General’s (OAG) enforcement division, sued Paxton in November 2020 for wrongful termination after they accused him of bribery and other crimes.
They have argued that one of Paxton’s donors, Natin “Nate” Paul had undue influence over the state attorney general. Paul was indicted last June on eight counts of financial fraud, including allegedly making false statements on loan application forms not just in Texas but in New York, Connecticut and Ireland as well. Paxton has denied any wrongdoing in this case.
There were concerns about this connection, which led to his impeachment in the Texas House of Representatives. The senate found him not guilty..
The Dallas Morning News reported from the courtroom on Tuesday that Paxton was mostly silent during the hearing before Judge Andrea Beall. She rejected efforts by Paxton’s lawyer to completely dismiss the case and indicated she was prepared to proceed.
However, this was before the parties announced they had reached an agreement.
“No judge can compel a prosecutor to present evidence,” she commented.
If Paxton violates the terms of the agreement, the criminal securities fraud trial will resume quickly.