McKINNEY, Texas (CN) – Texas Attorney General Ken Paxton will face two criminal trials on felony charges of securities fraud and failing to register with state securities regulators, prosecutors said Thursday at a pre-trial hearing. If convicted of all charges he could be sent to prison for up to 99 years.
Paxton’s attorneys appeared surprised by the announcement before state District Judge George Gallagher.
Defense attorney Dan Cogdell, of Houston, shook his head as he complained that a second trial will “either double or triple” the cost to Collin County taxpayers.
“I think from a judicial resources standpoint, given the fee structure that is in place, that is absurd,” Cogdell told the judge. “We are not opposed, and we request that he be tried together.”
Special prosecutors Kent Schaffer and Brian Wice said they want to try Paxton on a third-degree felony count of failing to register with the Texas State Securities Board first, then on two first-degree felony counts of securities fraud. He was indicted by a Collin County grand jury on August 2015.
Schaffer said the failure to register charge will make for a “straightforward, simple case.” He said the other trial will be “much, much longer” with several witnesses and transactions for to a jury to contemplate.
“There is nothing in common except the defendant,” Schaffer told reporters after the hearing. “So for people sitting on the jury, it’s a much more confusing situation.”
Paxton is accused of failing to tell investors in McKinney-based technology firm Servergy that he would earn commissions on their money, and of lying to them that he was investing in the company.
Judge Gallagher declined to rule immediately on the prosecutors’ request to change venue for trial, saying he will “at least try to choose a jury” in Collin County.
Prosecutors called several witnesses to support their claims that Paxton has engaged in a 22-month long “crusade” to taint the jury pool and discredit his accusers and the prosecution.
“The state of Texas cannot get a fair and impartial trial in Collin County. Neither can the victims it represents. This issue is simply not in doubt,” the 57-page motion to change venue states. “Paxton’s posse of spokesmen, supporters and surrogates - a clique herein collectively referred to as 'Team Paxton' - has embarked on a crusade clearly calculated to taint the Collin County jury pool.”
Prosecutors called J.D. Miles, a reporter with CBS-affiliate KTVT, who conducted an interview with former U.S. Senator Rick Santorum, R-Penn., who was critical of the case against Paxton. Miles denied being a part of a conspiracy to taint the jury pool.
Prosecutors also called Paxton consultant Wayne Dolcefino, a former reporter with ABC-affiliate KRTK-TV in Houston. Dolcefino denied that Paxton’s defense attorneys asked him to leak confidential Texas Rangers reports to a blogger. Dolcefino denied that he would have leaked the reports had he known it was illegal, stating he thought the reports were public record.
Paxton’s first trial is set to begin on May 1, with jury selection beginning on April 20.
Paxton tried and failed to get the cases thrown out, arguing the failure to register charge is from a “vague” and invalid state law.
He argued the securities fraud charges should have been voided when a judge presiding over the grand jury asked for “volunteers” who were “willing to serve” on the grand jury.
Gallagher rejected those arguments. Subsequent appeals to the Fifth Court of Appeals and the Texas Court of Criminal Appeals were unsuccessful.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.