AUSTIN, Texas — Texas Attorney General Ken Paxton's securities fraud case likely will not be going to trial in April after prosecutors and Paxton's attorneys have reached a tentative pre-trial diversion agreement, three sources tell KVUE Senior Reporter Tony Plohetski and the Austin American-Statesman.
That agreement could end a nine-year legal saga that would have gone to trial on April 15 and for which Paxton faced up to 99 years behind bars.
Under conditions of the proposed agreement, Paxton likely will have to perform community service, take legal education classes and pay a six-figure restitution. He will not have to enter a plea, and the cases would be dismissed if he meets the terms of the deal with prosecutor Brian Wice, the sources said.
The sources, who are familiar with the negotiations, asked to remain anonymous because they are not authorized to speak publicly about the ongoing matter.
KVUE reached out to prosecutor Brian Wice, but he declined to comment.
Dan Cogdell, who represents Paxton, said, "I am not going to comment on something that hasn't happened and may well not happen."
In 2014, Paxton 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.
State District Judge Andrea Beall likely will not have to accept the agreement, and the court's involvement is often a legal formality in these types of agreements.
Such pre-trial diversion is not uncommon in urban counties across Texas. The approach allows defendants to keep a potential conviction off their record and represents the wide authority by prosecutors to decide the outcome of a case.
If an agreement is not reached on Tuesday, the trial is set to continue on April 15.
Paxton remains under investigation in a separate matter, where he is accused of abusing his office to help Austin investor Nate Paul.
Those allegations triggered a historic impeachment trial last year of Paxton that ended with senators acquitting him of impeachment articles.
The allegations also led to a proposed $3.3 million settlement with whistleblowers from Paxton’s office that remains unresolved.