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Texas AG Ken Paxton securities fraud trials will be held in Houston, appeals court rules

The decision could restart the attorney general’s 8-year-old felony cases at the same time as he prepares for an impeachment trial that could result in his removal from office.

Texas Attorney General Ken Paxton
Texas Attorney General Ken Paxton speaks with lawyers after he appeared for arraignment in State District Judge George Gallagher’s court in Fort Worth, Thursday, August 27, 2015. Paxton was indicted in 2015 on two felony counts of securities fraud and one count of failing to register with the State Securities Board.(Paul Moseley / Fort Worth Star-Telegram)

By Lauren McGaughy

AUSTIN — Texas Attorney General Ken Paxton will be tried on felony securities fraud charges in Harris County, the state’s top criminal court ruled Wednesday.

In a split decision, the Texas Court of Criminal Appeals chose Harris over Collin County as the trial venue because they said the judge who originally set the trial there did so properly.

“The standards we use to judge will inevitably be applied against us. Thus, even the noblest of goals, no matter how righteous, cannot justify improper means. It leads away from the enlightened order provided under the rule of law,” Judge Bert Richardson wrote for the majority. “Today we fulfill our duty by upholding our Constitution’s rule of law and affirming the wisdom of its framers.”

All nine of the court’s judges, who are elected to the bench, are Republican.

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The ruling was a loss for Paxton, a third-term Republican who grew his political career in Collin County and has fought for years to hold his trials there. It means Paxton’s fraud cases — which have been mostly stalled since he was indicted nearly eight years ago — could be restarted as the attorney general is also preparing for an impeachment trial in the Texas Senate that will determine whether he is removed him from office.

The Senate impeachment trial will start sometime before Aug. 28; rules will be set next week.

Paxton’s defense lawyers can ask the appeals court to reconsider its venue decision, which, if it agrees, would stall the case yet again. Philip Hilder, one of Paxton’s attorneys, said they are still evaluating their options.

“I wholeheartedly disagree with the court’s opinion,” he added, stating the judge who set Harris County as the trial venue lacked the authority to do so. “It’s pretty simple.”

Brian Wice, one of the special prosecutors pursuing the cases against Paxton, applauded the decision.

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“We’re gratified but not surprised that the Court recognized that this defendant must stand trial before a Harris County jury and a judge who will follow the law,” he said in an emailed statement.

In summer 2015, a Collin County grand jury indicted Paxton for allegedly persuading friends to invest in a McKinney technology company called Servergy Inc. without telling them he received 100,000 shares of stock. Paxton was also indicted for allegedly funneling clients to a friend’s investment firm without being registered with the state.

He was booked on two first-degree felony fraud charges for the Servergy issue, and one third-degree felony for the failure to register, and released on bond. If convicted, Paxton could face two to 10 years in prison for the third-degree felony and five to 99 years for each of the first-degree felonies, as well as fines.

He had pleaded not guilty to all charges.

The cases have repeatedly stalled in the eight years since Paxton’s indictments. The delays were among the 20 articles of impeachment the House approved against Paxton last month. Article XI accuses him of obstruction of justice and abuse of the judicial process for finding ways to thwart the fraud proceedings for years.

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Paxton “concealed the facts underlying his criminal charges from voters by causing protracted delay of the trial, which deprived the electorate of its opportunity to make an informed decision when voting for attorney general,” the impeachment articles allege.

The lengthiest delays have been over how much the special prosecutors pursuing the case should be paid, and where to hold the trial. Unforeseen disasters, including Hurricane Harvey, also slowed the process.

The fraud cases originated in Collin County, where Paxton’s alleged crimes took place. But they were moved to Harris County in 2017 after the then-presiding judge agreed that the prosecutors might struggle to impanel an impartial jury in Collin County, where Paxton lived and worked for decades.

Paxton’s lawyers took issue with the move to Harris County, which politically is more liberal. They challenged the decision by arguing that the judge’s time presiding over the case had already expired when he decided the cases should be moved.

A Houston appeals court agreed with Paxton in summer 2021, moving the cases back to Collin County. The prosecutors fought that decision, and the cases were put on hold. The Court of Criminal Appeals took up the issue in March 2022 to make the final call.

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It took the appeals court more than a year to rule, during which time Paxton was reelected.

Judge Sharon Keller disagreed with the majority opinion.

“The Court cites no case supporting its conclusion that a regional presiding judge can vicariously agree to allow the holding of court by a different district judge under the Texas Constitution. Because the law is unsettled, mandamus relief is inappropriate,” wrote Keller, who was joined in her dissent by Judge Mary Lou Keel.

Judge Kevin Yeary also dissented.

Tony Buzbee, a Houston attorney leading Paxton’s impeachment defense, said the court’s decision was “designed to create maximum negative press and political damage” for Paxton and his upcoming Senate trial.

“Today’s decision doesn’t matter. This case is a loser,” Buzbee said in a statement.

This story, originally published in The Dallas Morning News, is reprinted as part of a collaborative partnership between The Dallas Morning News and Texas Metro News. The partnership seeks to boost coverage of Dallas’ communities of color, particularly in southern Dallas- at the bottom.

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