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Texas AG Ken Paxton will be deposed in fraud case after election, lawyer says

Ken Paxton could be forced to answer questions about his 2015 indictments under oath

Texas Attorney General Ken Paxton

Texas Attorney General Ken Paxton(Shafkat Anowar / Staff Photographer)

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AUSTIN — Lawyers representing the men who accused Texas Attorney General Ken Paxton of securities fraud will be able to question him under oath — but not until after the election.

Collin County District Court Judge Cynthia Wheless has ordered Paxton to sit for a one-hour deposition on Nov. 28, court records show.

Terry Jacobson, who along with Dallas lawyer Alex More represents GOP Rep. Byron Cook of Corsicana and Florida billionaire businessman Joel Hochberg, confirmed that Wheless made the decision at a hearing Friday and signed the order Tuesday.

Paxton’s agency and campaign staff, as well as his attorney, Mitch Little, did not respond to requests for comment.

The deposition order comes after Paxton filed motions to reject at least two subpoenas in the last three months, citing scheduling conflicts.

Setting the deposition for late November means Paxton won’t have to answer questions about his securities fraud charges before the Nov. 8 midterm election, when he faces Democratic challenger Rochelle Garza.

In addition to his 7-year-old fraud indictments, the conservative Republican also faces a whistleblower lawsuit and an FBI bribery investigation.

Paxton has denied wrongdoing in the cases, stating he is the target of baseless witch hunts.

The deposition is tied to a yearslong dispute between Paxton and two former friends accusing him of defrauding them.

In 2015, Cook and Hochberg alleged Paxton violated state securities laws by persuading them to invest in a McKinney technology company without telling them he’d received company stock. Cook, who served as chairman of the State Affairs Committee, and Paxton both served in the Texas House and invested in a number of ventures together.

That summer, a Collin County grand jury indicted Paxton on two felony securities fraud charges and one felony charge of failing to properly register with the state securities commission. If convicted, he faces five to 99 years on each fraud charge, plus an additional two to 10 on the registration charge, plus fines.

The year after his indictment, a Paxton loyalist fired back at Cook and Hochberg in the case that is at the center of this deposition fight.

In a civil lawsuit, Charles “Chip” Loper III accused the two men of concocting a complex “self-dealing” scheme to profit off the investment funds of a mineral assets company called Unity Resources. Loper said the alleged scheme hurt him and his father financially.

The Lopers, who founded a Frisco insurance company, are close Paxton allies. They’ve donated to his campaign and to a Paxton defense fund, and Loper III manages the attorney general’s blind trust.

Cook and Hochberg’s lawyers called the suit a tit-for-tat attempt to “smear and tarnish” their clients’ reputations after accusing the attorney general of fraud.

They achieved a victory last year by adding Paxton as a “responsible third party” to the Unity lawsuit. Like them, Paxton was an investor and also served as the company’s lawyer, the two men argued, saying he too should be held responsible for any alleged wrongdoing.

The decision does not mean Paxton has been deemed liable for any alleged wrongdoing, nor did it clear Cook or Hochberg.

While tied together, the Unity lawsuit is separate from Paxton’s fraud case. His indictments remain active and, due to a number of delays, he has not yet faced a jury. Paxton’s lawyers and prosecutors are battling over where to hold the trial.

Since June, Cook and Hochberg’s lawyers have been trying to depose Paxton in the Unity case, during which they can ask about his securities fraud indictments.

Their first subpoena called for Paxton to appear on July 12. But his lawyer said he would be traveling at that time, citing both an upcoming visit to China “with other attorneys general” and a trip to Europe.

A search of Paxton’s social media presence doesn’t indicate when or whether these trips took place, and his agency and campaign staff didn’t answer questions about when and whether the attorney general took the trips.

“To require him to change his plans at this late date would cause Paxton to incur an undue burden and expense,” Little wrote June 15.

Later, Paxton was subpoenaed to appear on Aug. 19. But his lawyer again fought back, saying there were unresolvable scheduling conflicts. Paxton was deposed once in the Unity case in August 2019, but this record was deemed private and remains under seal.

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