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Former Democrat Rep. TJ Cox was arrested by the FBI on dozens of charges related to financial fraud, according to public records with the Fresno County Sheriff’s Office.
Federal agents made the arrest at approximately 8:30 a.m. in Fresno, California, the records show.
The Justice Department said that Cox was arrested with “15 counts of wire fraud, 11 counts of money laundering, one count of financial institution fraud, and one count of campaign contribution fraud.”
Cox became a congressman in 2018, defeating David Valadao. He lost in 2020 by roughly 1,500 votes. Cox entertained the idea of running in 2022, but he eventually just endorsed Democrat Rudy Salas in the race.
Cox faces up to a maximum of 20 years in prison and a $250,000 fine for wire fraud and money laundering, the Justice Department said.
Politico reported:
The federal indictment accuses Cox of using a cluster of business entities to enrich himself while saddling business partners with losses. The document describes a scheme in which Cox siphoned off money into secret accounts and used the proceeds to pay off his own debts, cover personal costs like private school tuition and fund his political ambitions. He allegedly fabricated a board meeting to secure loan funding and lied on a mortgage loan application.
In a statement, DOJ said the California Democrat allegedly participated in “multiple fraud schemes” over a number of years. Between 2013 and 2018, he allegedly obtained “over $1.7 million in diverted client payments and company loans and investments” through off-the-books bank accounts.
Some of the diverted money went toward Cox’s successful campaign for Congress, according to the federal government. The indictment describes Cox distributing $25,000 among relatives and business associates that they could then give to his campaign. Cox narrowly unseated then-Rep. David Valadao (R) in the battleground district before losing a rematch to Valadao in 2020.
According to the indictment, Cox was trying to funnel money through allies to help his standing in the race.
“The purpose of emphasizing 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 says.
The indictment also states that Cox fraudulently obtained a $1.5 million construction loan to develop a recreation area in Fresno but falsely said it would be guaranteed. The loan defaulted and promoted a loss of more than $1.28 million.
Salas, who Cox endorsed, distanced himself from Cox on Tuesday following the indictment. He said in a statement, “T.J. Cox has disgraced himself.”
The former lawmaker owed $145,000 in unpaid federal income tax in early 2020, prompting the IRS to place a lien on him and his wife.
Cox is expected to be arraigned at 5 p.m. EST on Tuesday and is currently in custody.
