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Texas attorney general indicted by grand jury on fraud charges: reports

AUSTIN, Texas (Reuters) - The attorney general of Texas has been indicted on securities fraud and other charges over an alleged scheme to mislead investors in a technology company, the New York Times and other media reported on Saturday.The three-count indictment against Ken Paxton, a Republican, will be unsealed in Dallas on Monday, when the former longtime state lawmaker is expected to turn himself in to authorities, according to the Times.

The newspaper named Kent A. Schaffer, one of the two special prosecutors handling the case, as one of its sources.

Reuters could not immediately confirm the report, and a spokesman for the attorney general could not be reached for comment on Saturday afternoon.

Schaffer and the other special prosecutor on the case, Brian Wice, declined to confirm the report when reached by Reuters, instead releasing a statement only that they were committed to seeing that justice was done.

The grand jury has been asked to determine whether there was enough evidence to indict Paxton, who came to office this year with strong Tea Party support, on first-degree felony charges.

Paxton drew national attention when he said county clerks in Texas who object to gay marriage on religious grounds can refuse to issue marriage licenses to same-sex couples despite the landmark U.S. Supreme Court ruling in June requiring states to allow same-sex marriage.

When he was in the state legislature, Paxton was hired to seek clients by an investment firm called Mowery Capital Management, which is facing allegations from the State Securities Board of defrauding investors.

The board found in May 2014 that Paxton was not properly registered as an investment adviser in his work with the firm. It reprimanded him and fined him $1,000.

Paxton’s name also appears in a federal court document as a major investor in a Dallas-area firm in a U.S. Securities and Exchange Commission investigation.Court documents in the federal investigation of the technology firm called Servergy do not make any allegations of misconduct by Paxton or draw links to the investigation into securities fraud in Texas.

“Texans deserve an AG who spends his time putting lawbreakers in jail rather than one desperately trying to avoid jail time himself,” said Matt Angle, director of the Lone Star Project and a prominent critic of Paxton.

Reporting by Jon Herskovitz in Austin and Dan Whitcomb in Los Angeles