Securities Fraud Charges Dropped Against Texas AG Ken Paxton in $300,000 Restitution Deal

Texas Attorney General Ken Paxton scored a major legal and political victory on March 26, as prosecutors dropped a long-running securities fraud case against him in a $300,000 restitution deal with no admission of guilt.

“Look, we’re glad to have this matter behind [us]. This case has been pending longer than the Beatles were together—literally,” Mr. Paxton’s defense attorney, Dan Cogdell, told reporters outside a Houston courtroom on March 26.

“It’s been nine years, and today marks the end of what, in our opinion, should have happened a long time ago,” he added.

Mr. Paxton’s legal drama began in 2015 when he was indicted on three felony securities fraud charges that carried a possible sentence of life in prison. He was accused of defrauding investors in a Dallas-area tech company called Servergy by not disclosing that the company was paying him to recruit them.

When the charges were handed down in 2015, Mr. Paxton told supporters in an email that he expected to be “fully vindicated.”

Now, nine years later, the state offered Mr. Paxton a deal to settle the case. His attorney told reporters, “The state has made an offer, which we have accepted, to dismiss the case upon Mr. Paxton doing a few things.”

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One of the things Mr. Paxton will be required to do under the 18-month pre-trial agreement is to pay $300,000 in restitution to victims. He must also complete 100 hours of community service and 15 hours of legal ethics education. Crucially for Mr. Paxton, the deal does not require any admission of guilt.

“He is more than happy to comply with that agreement,” Mr. Cogdell said. “It is not a plea bargain. He didn’t plea; there is no admission of guilt, there will never be an admission of guilt because he’s not guilty.

“We’re glad to have this behind us,” he added.

Mr. Paxton was present in the courtroom, according to The Associated Press, and affirmed to state District Judge Andrea Beall that he had signed the agreement.

The Epoch Times has reached out to Mr. Paxton with a request for comment on the deal, which also allows him to remain in his elected position and doesn’t impact his law license.

The settlement represents another win for Mr. Paxton, who, in September 2023, was acquitted on 16 articles of impeachment.

Mr. Paxton is widely viewed as one of the most prominent U.S. legal conservatives, taking up issues defending religious liberty, the Second Amendment, and the right to life.

Impeachment Drama

Last year, Mr. Paxton was impeached by Texas’s GOP-led House on allegations including bribery and abuse of power.

The charges centered on allegations that Mr. Paxton used his office to help Austin real estate developer Nate Paul, who was under federal investigation.

In October 2020, a number of top deputies in Mr. Paxton’s agency told the FBI that they believed the attorney general had used his office to help Mr. Paul, who had donated $25,000 to Mr. Paxton’s reelection campaign in 2018.

All of the whistleblowers resigned or were fired, with their allegations leading to a federal investigation into Mr. Paxton.

The Department of Justice later took over the investigation, charging Mr. Paul on June 6, 2023, with making false statements to influence financial institutions’ actions on loan applications.

No federal charges have been filed against Mr. Paxton, who was elected to a third term as Texas attorney general in November 2022.

The allegations relating to Mr. Paul were a major part of the 16 articles of impeachment filed against Mr. Paxton, including bribery and abuse of public trust.

For instance, the articles accused Mr. Paxton of benefiting from Mr. Paul’s renovations to his home in exchange for “favorable legal assistance” and “specialized access” to the attorney general’s office.

However, after eight days of testimony, Texas state senators voted on Sept. 16, 2023, to acquit Mr. Paxton on all 16 articles of impeachment.

Acquittal

Mr. Paxton’s defense attorney, Tony Buzbee, argued that the impeachment was a baseless attack by political foes seeking to hamstring a formidable opponent who championed numerous conservative causes.

Mr. Paxton’s acquittal was met with positive and negative reactions.

Former President Donald Trump offered his congratulations and criticism of the impeachment.

“Congratulations to Attorney General Ken Paxton on a great and historic Texas sized VICTORY. I also want to congratulate his wonderful wife and family for having had to go through this ordeal, and WINNING,” President Trump wrote on his social media platform Truth Social.

By contrast, Rick Wilson, who co-founded the Lincoln Project, a political action committee established by former Republicans opposed to President Trump, criticized Mr. Paxton’s acquittal.