Ken Paxton sells himself as the man who takes down fraudsters. "In Texas, we fight fraud head-on and will not rest until every last corrupt actor is brought to justice," he said in a news release last year. In a recent post promoting a campaign ad, he wrote: "As Attorney General, I've made big pharma and fraudsters pay billions."

Now we know who Paxton's trust had been doing business with.

A joint investigation by ProPublica and The Texas Tribune, published October 23, found that a blind trust set up for Paxton and his wife, state Sen. Angela Paxton, put $600,000 into a construction-materials company run by Scott Sherman — a North Texas home builder who had finished a federal prison sentence for mortgage fraud four years earlier.

Paxton is the Republican nominee for U.S. Senate in Texas. He would not answer the reporters' questions about the investment, or about whether he knew Sherman was a convicted felon.

Who Scott Sherman is

Sherman ran a homebuilding firm called Artisan Operating LP when he pleaded guilty in 2014 for his role in a mortgage fraud conspiracy. According to the investigation, the scheme pumped up home prices to get bigger loans on more than two dozen properties around Dallas-Fort Worth.

After prison, Sherman and his father built Wildcatter Sand Services and Grayson County Sand and Gravel. After the Paxtons' trust put in its $600,000, Sherman went shopping: a sand mine in Denison and a concrete plant in Gunter, a town of about 2,000 people near the Oklahoma border.

The man who calls himself Texas's top fraud fighter was, through his trust, an investor in a convicted fraudster's business.

Richard Painter, the top ethics lawyer for President George W. Bush, put it plainly. He said he would have thought "the attorney general of Texas would have the good sense not to be dealing with a convicted felon."

The "blind" trust wasn't blind

A blind trust is supposed to work like a wall. An official hands their money to someone else to manage and is not supposed to know what it's invested in — so they can't use their public job to help their own investments.

The Paxtons signed papers saying their friend Chip Loper would manage the trust without consulting them or taking "any instructions regarding investment matters." The records say otherwise:

• Paxton texted with Loper about investments. Text messages that came out during the impeachment probe showed the two men discussing specific investments.
• Paxton bought homes and then moved them into the trust. Mortgage and deed records show he bought eight properties between 2015 and 2026 and then transferred them in. We've already reported that Paxton told the Senate he owns seven homes and earns nothing from any of them, even though six were listed for rent.
• The Paxtons claimed Wildcatter's losses on their own taxes. Their 2020 joint federal tax return claimed more than $93,000 in losses from Wildcatter Sand Services and Grayson County Sand and Gravel.

"That is proof positive that there's nothing blind about this trust," Washington University law professor Kathleen Clark told the reporters. If Paxton "can report on his tax return a transaction, then he is not blind to the transaction."

This matters for the job Paxton is asking Texans to give him. Ethics expert Donald Kettl told the reporters that U.S. Senate rules require a senator with a blind trust to have no knowledge of what's in it.

Angela Paxton sat on the company's advisory board — and voted on a bill that helped it

Angela Paxton joined a Wildcatter advisory board in 2022 and was still on it in 2025, according to her financial disclosures, which call the role "non-governing."

Neighbors of Wildcatter's concrete plant in Gunter complained to state environmental regulators about clouds of dust that they said coated their homes for up to 12 hours a day. The Texas Commission on Environmental Quality issued violation notices to Wildcatter Redi-Mix, which runs the plant, in 2021 and 2022.

Then their state senator, Drew Springer, filed a bill that let the agency ignore people who filed more than five unproven complaints in seven years. Neighbors said it was aimed at shutting them up.

While she sat on the board of Wildcatter's parent company, Angela Paxton voted for that bill. She did not recuse herself. Her spokesperson said the bill didn't relate to any specific company and that she didn't know about any complaints against Wildcatter.

Deirdre Diamond, a respiratory therapist who led the local fight against the plants, moved away after the bill passed. She said she feared what the plants were doing to her children's health. When she learned about the Paxtons' investment, she said: "You can't pretend to be about protecting the people when you directly profit from it."

The money flowed to the Paxtons while the company stopped paying local schools

Bank statements from the impeachment records show what happened next:

• In the months before the bill passed, four Wildcatter companies wired more than $73,000 to the Paxtons.
• About $10,000 arrived in the two weeks before Angela Paxton voted on the bill. Another $12,000 came the week after it passed the Senate.
• All told, Wildcatter companies wired the Paxtons' trust 15 payments totaling more than $83,000 between January and June 2023. The records stop in June, so nobody knows yet whether the payments kept coming.

The reporters say the limited records can't show why the payments were made or how the companies booked them.

But here's what was happening at the same time. Wildcatter Sand Services — the company the trust had invested in — already owed more than $31,000 in back taxes, according to Grayson County records. The next year, two Wildcatter companies fell behind on nearly $200,000 in 2023 property taxes owed to local schools, cities and counties. Those governments had to sue to get their money.

In other words, Wildcatter companies were wiring money to the Paxtons while they were falling behind on the local taxes that pay for schools.

The payments came during Paxton's impeachment

The first half of 2023 was the worst stretch of Paxton's career. Senior aides had accused him of abusing his office to help an Austin real estate investor and donor. In May 2023, the Texas House impeached him on charges including bribery. The state Senate later acquitted him.

Some of the Wildcatter payments arrived while a House committee was investigating those claims. On May 19, 2023 — a week before Paxton was impeached — the trust wired $9,000 to the law firm of Mitch Little, who later represented both the trust and Paxton at his impeachment trial. The trust's checking account would not have had enough money to cover that payment without the Wildcatter deposits that came in earlier that month, the records show. It is not clear whether Wildcatter's money paid for Paxton's lawyer. Neither Loper nor Little answered questions about it.

The aides who reported Paxton later won. A judge awarded four of them $6.6 million in 2025 after finding his office broke the Texas Whistleblower Act. Paxton vowed to appeal.

A pattern, not a slip

This isn't the first time this month that Paxton has been tied to people charged with federal fraud. Earlier in October, we reported that Paxton rang in 2025 in Dubai with two men indicted for healthcare fraud, one of whom had given him $190,000. His spokesperson didn't explain that one either — only that Paxton has been "politically persecuted for years."

What the records show

Ken Paxton's blind trust put $600,000 into a company built by a man fresh out of federal prison for mortgage fraud, and the records show Paxton knew enough about the trust to claim the company's losses on his taxes. In the first half of 2023, that company wired the Paxtons' trust more than $83,000 while it fell behind on taxes owed to local schools, and Angela Paxton voted for a bill that helped it while sitting on its advisory board. Paxton, who campaigns on making fraudsters pay, would not say whether he knew about Sherman's conviction.

Source

Ken Paxton Says He's Tough on Crime. His Trust Invested $600,000 in a Convicted Fraudster's Company. — ProPublica and The Texas Tribune, October 23, 2026