Texas AG Wins Long Fight for New Judge in Securities Fraud Case

McKINNEY, Texas (CN) – Texas Attorney General Ken Paxton got his wish Friday when the trial judge in his drawn-out criminal securities fraud case relinquished control to be replaced by another judge in Houston.

State District Judge George Gallagher on Friday vacated several orders he made after he moved the closely followed case from Collin County in suburban Dallas to Harris County on April 11.

The 5th Court of Appeals in Dallas ruled May 30 that Gallagher lost jurisdiction when he changed venue. Paxton relied on a little-used argument that state law requires the defendant to sign off on the judge continuing on the case after the venue change.

The state’s highest criminal court, the Texas Court of Criminal Appeals, rejected prosecutors’ appeal of the ruling on Wednesday, paving the way for Gallagher’s replacement.

Harris County District Courts Administrator Clay Bowman told The Dallas Morning News on Thursday that Administrative Judge Robert Schaffer would be in charge of naming a replacement judge.

Paxton was charged in 2015 with a third-degree felony count of failing to register with the Texas Securities Board and two first-degree felony counts of securities fraud. He faces up to 99 years in state prison if convicted.

He is accused of failing to tell investors in McKinney-based tech firm Servergy that he would earn commissions on their money, and of lying to them that he was investing in the company. The alleged crimes took place while he was a member of the Texas House of Representatives.

Gallagher, a trial judge from Tarrant County, has repeatedly ruled against Paxton during the run-up to trial. He rejected several motions to have the case thrown out in December 2015.

Gallagher further annoyed Paxton’s legal team in February when he granted prosecutors’ request to hold two felony trials, one for each type of charge. Paxton’s attorneys said the ruling was “absurd” and that it would “either double or triple” the cost to Collin County taxpayers.

In granting prosecutors’ request for a change of venue two months later, Gallagher was apparently persuaded that Paxton’s legal team had engaged in a “crusade” to taint the jury pool in his home county.

Paxton has doggedly tried to get Gallagher taken off the case since the venue change, asking to a new judge at least four times. Gallagher rejected Paxton’s first request for a new judge on April 17.

Paxton asked Harris County District Clerk Chris Daniels to randomly assign a Harris County judge two weeks later.

He then asked the head of the First Administrative Judicial Region in Dallas to remove Gallagher. Judge Mary Murphy declined, saying she lacks the power to do so and that the trial and appellate courts have jurisdiction.

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