Former Congressman TJ Cox indicted on 28 counts of wire fraud, money laundering

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Aug. 17—Former 21st Congressional District Rep. TJ Cox pleaded not guilty in federal court in Fresno Tuesday to dozens of charges, including wire fraud, money laundering and falsifying campaign contributions that equated to millions being stolen from investors and business partners since 2013, according to a news release from the U.S. Attorney's Office of the Eastern District.

Cox was indicted by a grand jury in a case that's being prosecuted by the U.S. Attorney's Office of the Eastern District.

Cox was arrested at 8:30 a.m. Tuesday in Fresno after surrendering to the Federal Bureau of Investigation, according to a spokesperson for the U.S. Attorney's Office. He will be released from custody and entered into pretrial diversion because a judge determined he was not a flight risk or dangerous to the public, Cox's attorney, Mark Coleman, said in a phone interview.

His client must meet certain conditions to remain in pretrial diversion, Coleman noted. Coleman added he received more than 28,000 documents Tuesday from the U.S. Attorney's Office, with more to come.

Cox will be provided with a "vigorous defense," Coleman added, despite the voluminous documents piled on him.

Outside the Fresno County Jail, Cox told Fox26 News that "we look forward to vigorously defending those allegations against me."

He told the television station he has not yet read the indictment.

"As you know, we served for a couple of years. We got a lot done for this city, and for this region, and hopefully that will continue, ah, under a, you know, people that are looking to serve the people," he told Fox26 News. "But I tell you what, politics is a tough game. I wouldn't be in this position today but for the politics, and I think we all know that."

Cox, a Democrat, was elected to the U.S. House of Representatives from the 21st Congressional District in 2018 after narrowly defeating Incumbent David Valadao. Rep. Valadao, R-Hanford, then defeated him by the same margin Cox had won by during the 2020 election.

"Our 2020 campaign exposed TJ Cox for what he is — a shady guy who continued to put his needs above the Valley," Valadao said Tuesday in an emailed statement. "I'm glad he is finally being held accountable for these outrageous crimes."

Valadao is up for election in the newly redrawn 22nd Congressional District, and will face off against state Assemblyman Rudy Salas, D-Bakersfield, in the November general election. Salas secured Cox's endorsement in the 2022 primary, but on Tuesday distanced himself from Cox.

"TJ Cox has disgraced himself," Salas wrote in a statement.

The U.S. Attorney's Office alleged 28 charges in a 25-page indictment filed Aug. 4. It lays out the basis of their claims. Cox faces 15 counts of wire fraud, 11 counts of money laundering, one count of financial institution fraud and one count of campaign contribution fraud.

Cox owned two for-profit companies and ran a nonprofit. His affiliation and business activities overlapped across these entities, which makes up the basis of the "schemes" described in the indictment.

A tax credit company

Cox started a tax credit company in 2010 with two other people. The business was an intermediary for real estate development projects that could qualify for federal funding through a tax credit program, the indictment states.

Starting from 2010 to 2019, that company was involved in more than a dozen Fresno projects, such as a movie theater, multiple health clinics and a daycare center, according to the indictment.

It went on to say Cox opened a bank account unbeknownst to his partners, and diverted checks made out to the tax credit company into this account.

These expenses were generally used "for personal expenses, to fund other Cox business ventures and to pay other Cox personal and business debts," according to the indictment.

The indictment estimated Cox caused losses exceeding $1 million.

An almond-processing company

Cox opened a bank account, unknown to his business partners of an almond company, and is accused of diverting money intended for their joint venture into his own personal account, the indictment alleges.

The indictment also states the former congressman told investors their money would fund operating expenses of the almond processing company, and they would get a fixed rate of return, according to the indictment.

Instead, that money was used by Cox to pay for private school tuition, credit card bills, mortgage payments and a political consultant, the indictment said, adding these expenses totaled tens of thousands of dollars.

At times, Cox would show loans from his tax credit company made to the almond-processing company. However, these loans were then spent on personal matters, the indictment alleges.

Cox took more than $750,000 from lenders and investors, according to the indictment.

"At all relevant times, Cox acted with intent to defraud," the indictment said multiple times.

A sports nonprofit

Cox also operated a small ice rink for ice skating and hockey in Fresno, and leased land from the city of Fresno — known as Granite Park — with promises to improve the land, the indictment alleges.

Cox then sought a $1.5 million loan from Clearinghouse, which specializes in making loans to companies in disadvantaged communities. Cox said his tax credit company was the commercial guarantor on the loan, but Clearinghouse needed agreement from every owner of the tax credit company, the indictment says.

The former congressman submitted a "false and fabricated board resolution" that indicated his fellow owners approved the loan when they hadn't, according to the indictment.

The sports nonprofit then defaulted on this loan, but Cox already had left the company. The tax credit company picked up the sport nonprofit's debt.

This loss exceeded $1.28 million in fraudulently obtained loan funds, according to the indictment.

Campaign fraud

Cox is charged with one count of making conduit contributions. A family member got Cox's personal money and then made a contribution to his 2018 campaign under their own name, according to the indictment.

The purpose of having individual donations was "to keep pace with competitors that received high numbers of private donations and to show viability of the candidacy through individual donations," the indictment said.

These donations helped the former congressman while he was seeking election and getting political party support. He is accused of distributing about $20,000 to three different people, the indictment said.

About $11,000 was also withdrawn from the sports nonprofit bank account, which was then deposited into a family's bank account. A family member then wrote Cox a check for $5,400, according to the indictment.

Cox then filed reports with the Federal Elections Commission that others made the contributions when "Cox well knew each contribution was funded by Cox using money in his personal possession," the indictment states.

A status conference is set for Oct. 12 in Fresno.

If convicted of all counts, Cox faces a maximum of 55 years in prison and could be ordered to pay $1.5 million in fines.

You can reach Ishani Desai at 661-395-7417. You can also follow her at @_ishanidesai on Twitter.