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Ken Paxton Snags Deal to Avoid Securities Fraud Charges

Jon Shapley/Houston Chronicle via Getty Images
Jon Shapley/Houston Chronicle via Getty Images

Texas Attorney General Ken Paxton reached a deal with prosecutors on Tuesday that will bring an end to a nearly decade-long legal battle over allegations of securities fraud.

Paxton agreed to pay $271,000 in restitution to his alleged victims within 18 months, according to prosecutor Brian Wice. He must also complete 100 hours of community service and attend legal education classes.

The deal, which comes two weeks before Paxton’s trial was expected to start, was instigated by state prosecutors, according to Paxton’s attorney, Dan Cogdell.

Cogdell told The Daily Beast that a pre-trial diversion was first raised five years ago and dismissed for a variety of reasons. Six weeks ago when it was raised again, Wice adamantly opposed the deal, Cogdell said. About three weeks later, after prosecutors Wice and Jed Silverman had interviewed a number of witnesses they came to the conclusion that “they did not have a case they could prove beyond a reasonable doubt,” and began pushing for a deal, he said.

“He is more than happy to comply with that agreement,” Cogdell told reporters on Tuesday morning. “At the end of the day it is not a plea bargain. He did not plea. There is no admission of guilt, there will never be an admission of guilt, because he is not guilty.”

Cogdell said he doesn’t know why state prosecutors went for a deal, but insisted that the case against Paxton was weak from the beginning. “Ken Paxton would never have been prosecuted in this case, but for him being the Attorney General,” Cogdell said.

Within a year of being sworn into office in 2015, Paxton was indicted on three felony security fraud charges over claims that he worked to secure investors for a server company called Servergy, without clarifying that he was on the company’s payroll. The ensuing legal battle stretched nearly nine years.

Cogdell said that Paxton was “relieved to have this behind him.”

Cogdell told The Daily Beast that Paxton would have preferred to have been found innocent in court, but had taken the deal for one simple reason: it was cheaper.

“He was going to have to pay me and the rest of his team a lot more than $300,000 to try this,” he said. “I may not be the world’s greatest lawyer, but I’m damn sure not the cheapest one either.”

Since first posting bond on the charges, Paxton has been re-elected twice. Wice said that any displeasure in the outcome of the case, “probably should have been directed at the ballot box.”

In February, Harris County state District Judge Andrea Beall rejected an attempt from Paxton to have the case tossed out.

Also last month, a separate state investigation into Paxton was taken over by the Justice Department’s Public Integrity Section. He first came under scrutiny from the FBI after his top allies accused him of bribery and abuse of his office.

Read more at The Daily Beast.

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