How the criminal case against Texas AG Ken Paxton abruptly ended after nearly a decade of delays

Mar 26, 2024, 9:06 AM | Updated: 2:08 pm

AUSTIN, Texas (AP) — The criminal case against Texas Attorney General Ken Paxton on securities fraud charges has ended after nine years — a span during which the Republican was reelected twice, impeached and acquitted, and emerged more politically powerful than ever.

He will stay in office and must pay nearly $300,000 in restitution under an agreement announced in a Houston courtroom Tuesday. The deal with special prosecutors abruptly ends the long-running saga, which at one time threatened Paxton’s rising political fortunes and could have sent him to prison, but later came to underline his resilience within the GOP.

The trial had been scheduled to start in April, putting Paxton closer than ever to finally having his day in court to face charges of duping investors in a tech startup. He still has legal troubles, including an FBI investigation and a whistleblower lawsuit from former aides who accuse him of corruption.


Long before Paxton tried to help former President Donald Trump overturn the 2020 election and stockpiled lawsuits against the Biden administration, he was a little-known Republican legislator whose courting of the party’s far right catapulted his ascent to Texas’ top law enforcement official.

But barely five months into the job in 2015, a grand jury in Paxton’s hometown of McKinney indicted him on felony charges of duping investors in a tech startup called Servergy. The accusations stemmed from deals Paxton allegedly steered in 2011 while he was still a state lawmaker. One investor he recruited was a fellow GOP legislator who put $100,000 into the company.

The indictment accused Paxton of recruiting investors while not disclosing that Servergy was compensating him to do so. He pleaded not guilty and his lawyers attacked the case as a political smear campaign.

Federal regulators also filed a civil lawsuit against Paxton. But a federal judge in 2017 dismissed the case brought by the U.S. Securities and Exchange Commission, a ruling that raised questions about the strength of the criminal prosecution.

“It is technically a felony under state law but it is extraordinarily rare to see this picked up in an actual felony prosecution,” said James Spindler, a professor of business law at the University of Texas at Austin.


The criminal case moved slowly from the start and was shuffled from one judge to the next.

A significant battle began outside the courtroom when Paxton allies spearheaded attacks on the special prosecutors’ $300 hourly rate, calling it an abuse of taxpayer money. Local leaders in Collin County, where Paxton lives and which is controlled by Republicans, agreed and voted to slash the pay.

As the years passed, Paxton’s lawyers blamed the delays on special prosecutors petitioning courts to restore their pay. Claims of unfair venues and biased jury pools also dragged the proceedings, which stood still for nearly a year.

Brice Wice, one of the special prosecutors, had previously indicated that he would consider a pre-trial deal a “slap on the wrist.” He said Tuesday that they had since reevaluated their chance of success based on evidence and witnesses.

Legal experts have said that since so much time has passed, the credibility and memory of witnesses would have likely been an obstacle at trial.

Jonathan Macey, a corporate law professor at Yale Law School, said the deal “seems like a reasonable resolution given how long things have been going on.”


As the securities fraud case languished, a potentially more serious threat erupted in 2020: an extraordinary revolt within the Texas attorney general’s office, where eight of Paxton’s closest aides reported him to the FBI.

They accused their boss of corruption and claimed he abused the office to benefit a wealthy Austin developer, Nate Paul, who was indicted last year on charges of making false statements to mortgage landers. Paul has pleaded not guilty.

The accusations propelled a historic impeachment in the Texas House, where Paxton once served. But in the Texas Senate — where Paxton’s wife, Angela Paxton, is one of 19 GOP senators — he was acquitted in a trial that laid bare the widening and increasingly bitter divisions among Republicans.


With the impeachment and securities fraud case now behind him, Paxton is set to continue a political revenge campaign against Republicans who sought to remove him from office.

At the top of that list is Texas House Speaker Dade Phelan, who oversaw the impeachment vote and was forced into a May runoff against a challenger backed by Paxton.

Paxton won’t be on the ballot again until 2026 and has not ruled out a primary challenge against Republican U.S. Sen. John Cornyn, who would be up for reelection that same year. Prior to the impeachment, Cornyn was one of a few prominent Texas Republicans to voice concerns about Paxton’s legal troubles.

It also remains unclear when or how the FBI investigation surrounding Paxton will resolve.


Associated Press reporters Acacia Coronado and Juan A. Lozano in Houston contributed to this report.

National News

FILE - Deborah Moody, an administrative clerk at the Alaska Division of Elections office in Anchora...

Associated Press

Alaska election officials to recalculate signatures for ranked vote repeal measure after court order

JUNEAU, Alaska (AP) — A state court judge on Friday disqualified numerous booklets used to gather signatures for an initiative that aims to repeal Alaska’s ranked choice voting system and gave elections officials a deadline to determine if the measure still had sufficient signatures to qualify for the November ballot. The decision by Superior Court […]

2 hours ago

Associated Press

UN approves more transparent procedures for people and entities to get off its sanctions lists

UNITED NATIONS (AP) — The United Nations Security Council unanimously approved more transparent procedures Friday for the hundreds of individuals, companies and other entities who are subject to U.N. sanctions and want to get off the blacklists. The resolution, co-sponsored by Malta and the United States, also authorizes the establishment of a new informal working […]

3 hours ago

FILE - Rep. Shelia Jackson Lee, D-Texas, speaks during a House Judiciary Committee meeting, Dec. 13...

Associated Press

Longtime US Rep Sheila Jackson Lee of Texas, who had pancreatic cancer, has died

Longtime U.S. Rep. Sheila Jackson Lee of Texas, who helped lead federal efforts to protect women from domestic violence and recognize Juneteenth as a national holiday, has died. She was 74. Lillie Conley, her chief of staff, confirmed Friday night that Jackson Lee, who had pancreatic cancer, had died. The Democrat had represented her Houston-based […]

3 hours ago

Stools line the bar at Elwood's Liquor and Tap on Thursday, July 18, 2024 in Milwaukee, Wis. This w...

Associated Press

Outside the RNC, small Milwaukee businesses and their regulars tried to salvage a sluggish week

MILWAUKEE (AP) — Jay Nelson was standing outside the convenience store he manages in downtown Milwaukee when one of his regular customers walked by on her daily stroll around the neighborhood. “I’ve been telling people to come and buy even just a bottle of wine,” she said, stretching out her arms. “I hope it helps.” […]

4 hours ago

Descendants of Nelson Bell, brothers Milford Fonza, front left, and Elmer Fonza, front right, surro...

Associated Press

In a California gold rush town, some Black families are fighting for land taken from their ancestors

COLOMA, Calif. (AP) — In a tiny town where the California gold rush began, Black families are seeking restitution for land that was taken from their ancestors to make way for a state park now frequented by fourth graders learning about the state’s history. Their efforts in Coloma, a town of around 300 people that’s […]

4 hours ago

An image of President Joe Biden is projected on a screen during the final night of the 2024 Republi...

Associated Press

Biden’s ability to win back skeptical Democrats tested at a perilous moment for his campaign

WASHINGTON (AP) — Despite a week of campaign stops, interviews and a determined insistence he is the best candidate to confront Republican Donald Trump, President Joe Biden’s efforts to revive his reelection bid and win over skeptical Democrats have done little to soften the push for him to exit the 2024 race. Biden has weighty […]

4 hours ago

How the criminal case against Texas AG Ken Paxton abruptly ended after nearly a decade of delays