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DALLAS (CBSDFW.COM) – A special prosecutor said that Texas Attorney General Ken Paxton faces first-degree felony charges for securities fraud.

Kent Schaffer, a criminal defense attorney from Houston who is acting as special prosecutor, said Thursday evening that the allegations of fraud against Paxton involve hundreds of thousands of dollars.

Schaffer said that this could be the result of either misrepresentations or material omissions that led to people being defrauded out of money.

Later this month, Schaffer said that he plans to present his case before a Collin County grand jury. He said that it could take several weeks for the grand jury to decide whether to indict or clear Paxton.

According to Schaffer, the Texas Rangers began investigating the case full-time in April.

In May 2014, the Texas State Securities Board fined Paxton $1,000 after finding that he solicited investment clients without being registered, a third-degree felony. The board then referred the case to a special prosecutor.

The Travis County District Attorney referred the case to Collin County District Attorney Greg Willis, a friend of Paxton’s. Willis recused himself, and a judge then appointed Schaffer as special prosecutor.

If Paxton is charged, and ultimately convicted, he could face penalties ranging from five years probation to life in prison.

Paxton, a Republican, easily won election in November, and entered office as Attorney General in January. If convicted, he could lose his law license and his job.

Paxton’s office referred questions to his attorney, Joe Kendall, who declined to comment.

Paxton spokesman Anthony Holm later issued the following statement:

“This appears to be a politically motivated effort to ruin the career of a longtime public servant. The Texas State Securities Board, and the Travis and Dallas District Attorneys offices all reviewed this matter, yet not one of them pursued a criminal action. Neither of the special prosecutors have significant prosecutorial experience. It appears that they have prosecuted only one case between them.
Not only do they appear inexperienced as prosecutors, they are from Houston. Meanwhile thousands of experienced prosecutors and former prosecutors are in the Dallas area.
From the outset their intention appears to have been to try this case in the media, not the courtroom. Texans deserve better, we deserve cases tried in courthouses, not the press.
These attacks on Ken Paxton appear to have become a political hit-job in the media, perhaps having the effect of inappropriately influencing the grand jury.”

Follow Jack on Twitter: @cbs11jack

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