AUSTIN, Texas — Texas Attorney General Ken Paxton's securities fraud case will not go to trial in April after prosecutors and the AG's attorneys reached a pre-trial diversion agreement Tuesday morning.
The deal, reached in a Harris County courtroom on March 26, resolves the 9-year-old securities fraud charges against Paxton.
The terms of the agreement state Paxton will have to perform 100 hours of community service in Collin County, Texas, and will have to pay a restitution of approximately $300,000. He will also have to take 15 hours of legal ethics education courses.
KVUE Senior Reporter Tony Plohetski said this is an "extra-judicial" agreement, and the judge acknowledged on the bench that she cannot order or force a prosecutor to try Paxton's case.
Brian Wice, the special prosecutor in this case, said Paxton must pay the restitution from his personal funds.
At the end of 18 months, the charges against Paxton will be dismissed.
Background on this case
Prior to the pre-trial diversion agreement, Paxton faced up to 99 years behind bars.
In 2014, the attorney general acknowledged that he failed to register with the Texas State Securities Board, a failure he called a "paperwork error.” In Texas, failing to register is a crime – one that Paxton himself voted into law.
Records show that Paxton was accused of soliciting clients for an investment company called Mowery Capital Management, run by his friend and campaign donor, Fritz Mowery, without being registered with the board. Testimony and records show Paxton received a 30% management fee for bringing in new investors.
Texans for Public Justice, a nonprofit watchdog organization, filed a complaint against Paxton that led to the appointment of two special prosecutors and a Texas Rangers investigation. That Texas Rangers investigation led to new allegations about Paxton's fundraising efforts on behalf of a company called Servergy, for which Paxton recruited investors in exchange for company stock.
Since the initial charges, the case has gone through a series of judicial halts, appeals and court transfers over the past nine years.