Former Fresno Rep. TJ Cox charged with fraud and money laundering

Former U.S. Representative TJ Cox of Fresno was arrested by the FBI on Tuesday after being charged with fraud and money laundering stemming from allegations that he stole from his own businesses.

According to the unsealed indictment, Cox, 59, faces 15 counts of wire fraud, 11 counts of money laundering and one count of financial institutions fraud and campaign contribution fraud.

The indictment alleges that Cox siphoned off at least $1.7 million from businesses he owned in off-the-books accounts and used some of the money to fund more than $25,000 in donations from illegal straws to his congressional campaign.

Cox, a Democrat, defeated Rep. David Valadao in 2018 to swing the Central Valley District from Republican control. He lasted just one term before losing the seat to Valadao in 2020.

He agreed to surrender to the FBI at the federal courthouse in Fresno, a spokesman told news station KSEE-TV, and was released on Tuesday evening after pleading not guilty. Court records show Cox surrendered his passport as a condition of his release.

“Politics is a tough game, and I wouldn’t be in this position today without politics,” Cox told KSEE.

He declined to answer further questions about the criminal charges.

From 2013 to 2018, Cox misappropriated customer payments and “solicited and then stole” the company’s loans and investments in two fraudulent schemes, federal prosecutors said. The first involved a Fresno-based community development corporation owned by Cox and two others, which facilitated loans and investments in businesses in low-income areas by offering tax credits to lenders.

Cox opened a second bank account using the company’s name without the knowledge of the other owners, diverted checks made out to the company to the second account, transferred some of the money to accounts affiliated with another of his companies and deposited the remainder in the company’s real account, prosecutors said in the indictment.

The alleged scheme took more than $1 million from the company and its customers, prosecutors said.

The second alleged fraud scheme involved an almond company that Cox became a partial owner of in 2012.

In 2015, Cox opened a Wells Fargo account under the company’s name into which he misappropriated the company’s investments and loans, prosecutors said.

“In some instances, no investment/loan funds were ever sent to the almond processing company, but were spent on Cox’s personal and business expenses,” prosecutors said.

Cox is accused of causing losses of $750,000 to Almond Company’s lenders and investors.

The indictment also alleges that Cox lied to obtain large loan funds.

As a business partner of a Fresno nonprofit sports organization that applied for a $1.5 million construction loan to develop land in the city’s Granite Park, he fabricated a council resolution of directors stipulating that his tax credit company would guarantee the loan, prosecutors said.

The loan was approved, but the nonprofit sports organization eventually defaulted and the tax credit company bought the debt after Cox left the company.

During his run for Congress in 2018, prosecutors said, Cox took money from the nonprofit sports organization and deposited it into the account of a family member, who made a donate to his campaign under someone else’s name.

He also gave money withdrawn from the Almond Company’s fraudulent account to family members and others who would donate the funds to his campaign, according to the indictment.

Additionally, Cox is accused of forging bank documents to show he had enough money to qualify for a $315,000 mortgage for a home he intended to rent and falsely stating that he would use the house as his primary residence.

To complete the home purchase, Cox needed $43,000 and allegedly used a payment of $46,600 from a client of his tax credit company to cover it via cashier’s check.

If convicted, Cox faces a maximum statutory sentence of 20 years in prison and a fine of $250,000 for wire fraud and money laundering, 30 years in prison and a fine of $1 million for wire fraud affecting a financial institution, and five years in prison and a $250,000 fine for voter fraud.

Los Angeles Times

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