Feds charge ex-congressman with 28 counts for alleged fraud schemes

·2 min read
FILE: T.J. Cox speaks on the campus of California State University, Fullerton on Thursday, Oct. 4, 2018. / Credit: Leonard Ortiz/Digital First Media/Orange County Register via Getty Images
FILE: T.J. Cox speaks on the campus of California State University, Fullerton on Thursday, Oct. 4, 2018. / Credit: Leonard Ortiz/Digital First Media/Orange County Register via Getty Images

Washington — Former Rep. TJ Cox, a Democrat from California, is facing more than two dozen federal charges stemming from what federal prosecutors said were multiple fraud schemes and campaign contribution fraud, the Justice Department announced Tuesday.

A 28-count indictment against Cox, who served one term, was unsealed in federal district court in California charging him with 15 counts of wire fraud, 11 counts of money laundering, one count of financial institution fraud and one count of campaign contribution fraud, according to the Justice Department.

Cox was elected to represent California's 21st Congressional District in 2018, but lost the seat to Republican David Valadao in 2020. He was arrested on Tuesday, court records show.

Federal prosecutors alleged that the "multiple" fraud schemes carried out by Cox targeted companies he was affiliated with, along with their clients and vendors. He is accused of creating unauthorized, off-the-books bank accounts and diverting money into them through "false representations, pretenses and promises."

The Justice Department said Cox obtained more than $1.7 million through two different fraud schemes perpetrated from 2013 to 2018, diverting client payments as well as company loans and investments he sought and stole.

Cox also allegedly submitted multiple false representations to a lender to receive mortgage loan funds to buy a property, which he falsely said would be his primary residence and included fake bank statements, according to federal prosecutors. The newly unsealed indictment, however, claimed Cox bought the property to rent it out.

The indictment also alleged Cox fraudulently received a $1.5 million construction loan to develop Granite Park, a recreation area in Fresno, California. But Cox and a business partner's nonprofit organization couldn't qualify for the loan without a "financially viable party" to guarantee the loan, so Cox falsely said a company affiliated with him would do so, according to the Justice Department.

As part of the scheme involving the construction loan, the former congressman allegedly submitted a falsified board resolution incorrectly stating that during a meeting, the company owners agreed to guarantee the loan to develop Granite Park. The meeting, however, never occurred, and the loan went into default, resulting in a loss of more than $1.28 million, federal prosecutors said.

While he was running for Congress in 2018, Cox also allegedly executed a scheme to direct more than $25,000 in illegal straw or conduit donations from family members and associates to his campaign, according to the Justice Department.

If found guilty, Cox faces up to 20 years in prison and a $250,000 fine for wire fraud and money laundering, a maximum of 30 years in prison and $1 million fine for wire fraud affecting a financial institution and financial institution fraud, and up to five years imprisonment and a $250,000 for campaign contribution fraud.

Court records did not list an attorney for Cox as of Tuesday afternoon.

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