Editor's note: This story has been updated throughout.
McKINNEY — Texas Attorney General Ken Paxton, the state’s top law enforcement officer, turned himself into jail Monday to be booked on felony securities fraud charges.
Wearing a pin-striped suit and a red tie, he smiled slightly for his booking photo. Then, he was promptly released from the Collin County Jail on $35,000 bond, according to records with the local sheriff’s office.
Paxton then apparently slipped out of his hometown courthouse unnoticed, eluding a throng of waiting media and Democratic protesters. Neither Paxton nor his lawyer, Joe Kendall, planned to make a public appearance after the booking, according to a spokesman for Kendall. Paxton’s side is expected to issue a written statement on the case later Monday.
Paxton faces three counts: two for securities fraud involving more than $100,000, and another for acting as an investment advisor or representative without registering.
The indictments, unsealed about noon Monday, allege Paxton committed fraud in July 2011 by offering to sell stock in a tech company to two people without telling them he was an investor in that company.
One of those people is believed to be state Rep. Byron Cook, R-Corsicana. The other is named in the indictment as Joel Hochberg.
The Texas GOP quickly jumped to his defense. The statewide party released a statement minutes after his booking that criticized the “sloppy process” that led to the charges.
“Ken Paxton, like all Americans, deserves to have his say in a court of law, rather than be judged in a court of public opinion that is presided over by liberal interest groups,” said Aaron Whitehead, the party’s spokesman.
But Democrats and liberal groups immediately called for his resignation.
“Ken Paxton has abused people’s faith in his public office,” said Craig McDonald, executive director of Texans for Public Justice, which filed a criminal complaint related to Paxton’s case. “He has engaged in outright deception to personally profit at others’ expense. These qualities make him dangerously unfit to be attorney general.”
Much of Paxton’s case has played out in public since even before he was elected in 2014. The State Securities Board first investigated him while he was a member of the Texas Senate. The board reprimanded and fined him $1,000 last year after he admitted to soliciting investment clients for a friend and business partner without properly registering with the state.
The case lay dormant for months – aside from efforts by election opponents to use it against him. Then, around the turn of the year, the public integrity unit in the Travis County district attorney’s office briefly investigated — and then decided that it didn’t have jurisdiction to file charges. The case moved to Collin County, where the district attorney assigned two special prosecutors from Houston to take charge.
Anthony Holm, a Paxton spokesman, has harshly criticized the work of those two prosecutors, Kent Schaffer and Brian Wice. News has regularly leaked out about their investigation, and Holm has accused them of being politically motivated publicity hounds.
Some conservatives have compared the case to other indictments of Texas Republican leaders, including former Gov. Rick Perry and former U.S. House Majority Leader Tom DeLay.
The special prosecutors have denied any political motives, nothing that they were appointed by a Republican judge from one of the most conservative areas in the state. Wice, in fact, worked as a defense attorney for DeLay during his criminal case.
Here's the text of the three indictments:
No. 416-81913-2015
THE STATE OF TEXAS V. WARREN KENNETH PAXTON, JR. IN THE 416TH JUDICIAL DISTRICT COURT OF COLLIN COUNTY, TEXAS
OFFENSE: Acting as an investment advisor representative without being registered by the Texas Securities Board in violation of Texas Securities Act, Section 29(I).
INDICTMENT
IN THE NAME AND BY AUTHORITY OF THE STATE OF TEXAS:
THE GRAND JURY for the County of Collin, State of Texas, duly selected, impaneled, sworn, charged and organized as such by the 416th District Court for the said County at the July Term, A.D. 2015 of the said Court, upon their oaths present in and to said Court that WARREN KENNETH PAXTON, JR., hereinafter styled Defendant on or about the 18th day of July, 2012 and before the presentment of this indictment, in the County and State aforesaid, did then and there knowingly and intentionally render services as an investor investment advisor representative to James and Freddie Henry and the aforesaid WarEN KENNETH PAXTON, JR., was then and there not duly registered as an investment advisor representative by and with the Securities Commissioner of the State of Texas.
AGAINST THE PEACE AND THE DIGNITY OF THE STATE.
/s/ FOREMAN OF THE GRAND JURY
7/7/15
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No. 416-81914-2015
THE STATE OF TEXAS V. WARREN KENNETH PAXTON, JR. IN THE 416TH JUDICIAL DISTRICT COURT OF COLLIN COUNTY, TEXAS
OFFENSE: In connection with the sale, offering for sale or delivery of, the purchase, offer to purchase, invitation of offers to purchase, invitations of offers to sell, or dealing in any other manner in any security or securities, engaging in fraud or fraudulent practice in violation of Texas Securities Act, Section 29(C)(Byron Cook).
INDICTMENT
IN THE NAME AND BY AUTHORITY OF THE STATE OF TEXAS:
THE GRAND JURY for the County of Collin, State of Texas, duly selected, impaneled, sworn, charged and organized as such by the 416th District Court for the said County at the July Term, A.D. 2015 of the said Court, upon their oaths present in and to said Court that WARREN KENNETH PAXTON, JR., hereinafter styled Defendant on or about the 26th day of July, 2011, and before the presentment of this indictment, in the County and State aforesaid, did then and there engage in fraud in connection with the offer for sale and sale of common stock of SERVERGY, INC., being a security to wit: stock, to BYRON COOK, hereinafter styled the complainant, in an amount involving $100,000 or more, by intentionally failing to disclose to the complainant, to wit: that WARREN KENNETH PAXTON, JR. had not, in fact, personally invested in SERVERGY, INC., and that WARREN KENNETH PAXTON, JR. would be compensated, and had, in fact, received compensation from SERVERGY, INC., in the form of 100,000 shares of SERVERGY, INC. stock, the said information being material fact.
AGAINST THE PEACE AND THE DIGNITY OF THE STATE.
/s/ FOREMAN OF THE GRAND JURY
7/28/15
----------------------------------
No. 416-81915-2015
THE STATE OF TEXAS V. WARREN KENNETH PAXTON, JR. IN THE 416TH JUDICIAL DISTRICT COURT OF COLLIN COUNTY, TEXAS
OFFENSE: In connection with the sale, offering for sale or delivery of, the purchase, offer to purchase, invitation of offers to purchase, invitations of offers to sell, or dealing in any other manner in any security or securities, engaging in fraud or fraudulent practice in violation of Texas Securities Act, Section 29(C)(Joel Hochberg).
INDICTMENT
IN THE NAME AND BY AUTHORITY OF THE STATE OF TEXAS:
THE GRAND JURY for the County of Collin, State of Texas, duly selected, impaneled, sworn, charged and organized as such by the 416th District Court for the said County at the July Term, A.D. 2015 of the said Court, upon their oaths present in and to said Court that WARREN KENNETH PAXTON, JR., hereinafter styled Defendant on or about the 26th day of July, 2011, and before the presentment of this indictment, in the County and State aforesaid, did then and there engage in fraud in connection with the offer for sale and sale of common stock of SERVERGY, INC., being a security to wit: stock, to JOEL HOCHBERG, hereinafter styled the complainant, in an amount involving $100,000 or more, by intentionally failing to disclose to the complainant, to wit: that WARREN KENNETH PAXTON, JR. had not, in fact, personally invested in SERVERGY, INC., and that WARREN KENNETH PAXTON, JR. would be compensated, and had, in fact, received compensation from SERVERGY, INC., in the form of 100,000 shares of SERVERGY, INC. stock, the said information being material fact.
AGAINST THE PEACE AND THE DIGNITY OF THE STATE.
/s/ FOREMAN OF THE GRAND JURY
7/28/15
Matthew Watkins contributed to this report. This article originally appeared in The Texas Tribune.
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