It doesn’t bode well when a state’s highest ranking law enforcement official, the Attorney General, is facing criminal charges. But that’s exactly the case for Texas, where State Attorney General Ken Paxton turned himself into jail in early August 2015. While he was released shortly afterwards on a bond of $35,000, criminal charges continue to pend against him.
Charged with Three Felony Counts
A.G. Paxton has been indicted with different felony charges, including two counts of security fraud. The most serious of the charges is a federal first-degree securities fraud charge. The indictment stems from Paxton’s involvement with Servergy, a Texas-based commuter company that allegedly paid Paxton a commission for investments Paxton recruited. Furthermore, the indictment alleges that Paxton encouraged large financial contributes to the company from others, without disclosing his own investment with the business. He also misrepresented himself as an investor.
Paxton Says He’s Not Guilty
Paxton has openly stated that he has no plans to resign, and pled not guilty at a hearing on Thursday, August 27th (during the hearing, he also requested that no cameras be present). Joe Kendall, Mr. Paxton’s former attorney, has said that the judge in the case has asked both parties to refrain from public comment, and that they are honoring the judges instructions. Kendall will be replaced—although by whom has yet to be decided—due to “differences….” that “adversely affect the attorney-client relationship.”
If convicted of the crimes, Mr. Paxton will likely face prison time. In Texas, a first-degree felony charge carries a penalty of between five and 99 years in prison; a second-degree felony conviction between two and 10 years in prison. Of course, Mr. Paxton will also face large court fines and legal fees.
As a note, Servergy has also faced an unrelated investigation on the part of the Securities and Exchange Commission. The investigation was conducted to discover whether or not the company’s founder had made fallacious statements to investors in order to sell Servergy stock.
It is unlikely that Paxton’s trial will take place for at least another year.