Indicted Texas AG Must Face Fraud Trial

     DALLAS (CN) – A Texas appeals court rejected Attorney General Ken Paxton’s bid to throw out his indictments on three felony securities fraud charges Wednesday evening, paving the way for trial.
     The en banc Fifth District Court of Appeals in Dallas rejected Paxton’s four arguments for dismissal, including three regarding Collin County District Judge Chris Oldner. Paxton claims Oldner improperly asked prospective grand jurors if they wanted to serve before the grand jury issued the indictments.
     Oldner later recused himself.
     “Because appellant’s complaint does not relate to an intentional and arbitrary disregard of the ‘means and methods provided by the Legislature in the selection of grand juries,’ we conclude appellant’s particular complaint regarding the selection of the grand jury, even if meritorious, would not render the grand jury without authority to proceed,” Chief Justice Carolyn Wright wrote in the 24-page opinion. “Consequently, his particular complaint does not fall within the narrow exception allowing him to challenge his indictments prior to trial.”
     Paxton, a Republican, was charged in Collin County in August 2015 with two first-degree felony counts of securities fraud and a third-degree felony count of failing to register with the Texas State Securities Board.
     Paxton paid a $1,000 fine in 2014 after he admitted he solicited clients for a friend’s investment firm without being registered as an investment advisor. Paxton was a member of the Texas House at the time. The Texas Rangers then investigated.
     Prosecutors say Paxton urged investors in 2011 to invest $600,000 in technology firm Servergy without telling them he would earn a commission on it, and misrepresented that he was investing in the McKinney-based company.
     Tarrant County Judge George Gallagher refused to dismiss the indictments in December, resulting in an appeal to the 5th Court. Paxton will now likely appeal to the Texas Court of Criminal Appeals.
     In rejecting Paxton’s fourth argument, the court disagreed with his claim that the trial court should have tossed a failure to register as an investment advisor charge because the Texas Securities Act is “so overbroad and vague that is it facially unconstitutional.”
     Special prosecutors Kent Schaffer and Brian Wice applauded the court’s ruling.
     “We are gratified but not surprised that just three weeks after oral argument, the en banc court of appeals unanimously concluded that Mr. Paxton’s claims were clearly without merit,” they said in a statement. “We are confident that the Court of Criminal Appeals will reject Mr. Paxton’s next round of appeals as surely and as swiftly as the court of appeals did today.”
     Defense attorney Philip Hilder, of Houston, said the 5th Court merely ruled that Paxton’s issues “were premature at this stage of the proceedings” and not without merit.
     “Respectfully, we disagree that these fundamental flaws cannot be challenged pretrial and will evaluate in coming days whether to raise these issues with the Court of Criminal Appeals,” he said in a statement.
     The U.S. Securities and Exchange Commission became involved in April when it filed a civil suit against Paxton and others in Dallas Federal Court, closely mirroring allegations in the criminal case: that he hid compensation he was given for touting Servergy.
     Hours before oral arguments before the 5th Court last month, Paxton posted a video on YouTube denouncing the criminal and civil lawsuits against him as retaliation by his political opponents and President Barack Obama.

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