Attorney General Paxton Re-Indicted in Fraud Case

After re-filing indictments against Attorney General Ken Paxton in his securities fraud case, two special prosecutors are pushing back against criticism from Paxton's attorney, who says the recent action shows that they "botched" the proceedings. 

"It is not unusual in any felony case, particularly fraud cases, for prosecutors to ask the grand jury to re-indict so as to provide sufficient notice to the accused as to the nature of the criminal conduct with which he is charged," Kent Schaffer and Brian Wice, the special prosecutors said in a prepared statement Tuesday evening. 

On Tuesday afternoon, the prosecutors re-filed two of the three charges Paxton faces  — two counts of first-degree felony securities fraud. The third charge — accusing Paxton of acting as an investment adviser or representative without registering – remained untouched. 

Paxton is accused of offering to sell two people more than $100,000 worth of stock in Servergy, a McKinney technology company, but not disclosing that the company was compensating him.

Paxton also didn’t make clear that he hadn’t personally invested in the company, the indictments allege. He received 100,000 shares, but that was in the form of compensation, according to the indictment.

 

One of the alleged victims in the case is listed as state Rep. Byron Cook, R-Corsicana. The other is identified as Joel Hochberg.

Paxton’s lawyer has said his client would plead not guilty, and Paxton has told supporters he expects to be fully vindicated.

The basics of the two re-filed charges in Collin County remained the same, but some language was tweaked.

In the charge naming Cook, for instance, prosecutors originally stated Paxton “had not, in fact, personally invested in Servergy.” The new charge states Paxton “had not, and was not investing his own funds” in the company.

Joe Kendall, Paxton’s attorney, criticized the re-indictment, saying it illustrated a process fraught with “troubling issues.”

“They had months to investigate and then rushed to indict,” Kendall said in a statement. “Now, the special prosecutors are back to clean up the botched indictments.  It should make every fair-minded person question the process in this case.”  

Not so, the prosecutors replied. 

"Contrary to the assertion of Mr. Paxton's criminal defense lawyer that the indictments charging his client with two counts of first-degree felony securities fraud were ‘botched,’ we obtained re-indictments to defuse the boilerplate arguments predictably advanced by the defense that the original indictments lacked specificity or were otherwise ambiguous," Schaffer and Wice said in their statement. 

Philip Hilder, a Houston-based criminal lawyer, said that while re-indictments don't happen all the time in such cases, they are not rare.

“In this particular case, it’s clear that the prosecutors were trying to get out front and clean up the indictment before the defense had the opportunity to attack the pleadings,” he said after reviewing one of the re-filed charges.

Also on Tuesday night, Paxton added a new member to his legal team: Peter Schulte. The prominent Dallas attorney announced his hire on Twitter.

Patrick Svitek contributed to this report.

 

Sign Up for The Brief

Our daily news summary