Texas AG Ken Paxton reaches deal in securities fraud case, agrees to six-figure restitution
HOUSTON, Texas (KTRK) -- The state's top law enforcement official, Texas Attorney General Ken Paxton, reached a deal in Harris County Tuesday morning to put some of his own legal issues behind him.
Paxton was indicted on felony securities fraud charges in the Dallas-Fort Worth area in July 2015. He was indicted on two first-degree felony charges, accused of failing to disclose to potential investors that he was being paid hundreds of thousands of dollars to promote a tech startup's stock.
He was also indicted on a third-degree felony charge for failing to register with the Texas State Securities Board while steering his legal clients to an investment advising business reimbursing him for those transactions.
"This case literally lasted longer than the Beatles were together," Paxton's attorney, Dan Cogdell, said.
Paxton is now receiving pre-trial intervention (PTI). His case is reset for 18 months, and the three charges levied against him will be dismissed if, in that time, he makes an approximately $270,000 restitution payment, completes 100 hours of community service, and 15 hours of legal ethics coursework.
"It shows that, perhaps, he needs to brush up on the ethical considerations that separate lawyers from grifters," prosecutor Brian Wice said.
Wice told ABC13 that pre-trial intervention absolutely had not been on the table up until the last few weeks.
"I first heard the word PTI six weeks ago," he said.
Cogdell told ABC13 it was first offered five years ago.
"I like Brian, but that's absolutely false," Cogdell said.
ABC13 asked both Wice and Cogdell why, after nearly a decade, a deal was reached this month, just weeks before Paxton was set to stand trial for the charges.
Wice told ABC13 he recently interviewed and reinterviewed nearly a dozen witnesses in the case.
Some had never been interviewed, others had not been interviewed since the Obama administration. Wice said that during the process, he found that the third-degree felony charge was not as strong as they had thought.
Cogdell said the responsibility to register with that board ultimately sat with Paxton's broker at the time, Frederick Fritz Mowery.
"What Fritz Mowery was going to say was that it was his responsibility to make sure that Ken was registered. These aren't shots from heaven," Cogdell said. "These are the facts from nine years ago."
Wice said issues also arose with the two first-degree felony charges, because the case dragged out for so long. For example, one of the alleged victims died last year.
"Do I wish that we would have had him deposed when he was alive to have made a record as to what he would have testified to? Absolutely. Look, there are a bunch of things I would have done differently, but I can't critique myself on a day when I think justice was ultimately served," Wice said.
Disputes over prosecutor pay in part delayed the case. Wice told ABC13 Tuesday he estimates he is still owed approximately $200,000.
Wice said because the deal is an agreement between prosecutors and Paxton, it will not be entered into the public record, shielding Paxton from additional public scrutiny. It is also not an admission of guilt.
However, it is not the end of Paxton's legal troubles. There is an ongoing federal probe looking at some of the same issues raised during impeachment proceedings that sources tell ABC13 will soon conclude. There are also additional matters before the state supreme court.
SEE PREVIOUS REPORT: Texas AG Ken Paxton to reach deal dismissing securities fraud charges, sources tell ABC13
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