Former Rep. T.J. Cox (D–Fresno) has accepted a plea deal with the federal government in his financial fraud case on Wednesday.
Cox will spend time in prison and faces millions of dollars in restitution as part of the deal.
Flashback: Cox was arrested in 2022 and indicted on 28 counts of financial fraud by a federal grand jury relating to his time with Central Valley New Market Tax Credits, where he worked before he served in Congress from 2019 to 2021.
- He was accused of illicitly obtaining over $1.7 million in client payments and company loans and fraudulently securing a $1.5 million loan for the Central Valley Community Sports Foundation.
The big picture: Per the deal, Cox will plead guilty to two counts: Wire Fraud and Wire Fraud Affecting a Financial institution.
- Cox has also agreed to pay a maximum of $3.5 million in restitution and could also be ordered by a judge to pay a fine.
- The maximum amount of prison time he faces is 20 years for the wire fraud charge and 30 years for the wire fraud affecting a financial institution charge. His prison time will be determined by a judge.
Go deeper: For the wire fraud charge, Cox admits that he defrauded others of money and property from December 2013 to October 2019.
- He diverted checks made out to Central Valley New Market Tax Credits to use for personal expenses, to fund other business ventures and to pay other personal and business debts.
- One such instance took place in October 2018, when Cox diverted $120,000 from a healthcare company intended for his tax credits company to his own personal account.
- Further, Cox also partially owned an almond processing company where he defrauded potential investors and lenders from April 2017 to December 2020.
- Cox solicited investments for the company, falsely representing that the money was needed for operating expenses, business expansion or equipment. He also told investors that they would receive a fixed rate of return and a percentage of ownership in the company. He took that money in a bank account that he set up under the almond company’s name without the consent from the other co-owners to divert the money for his own personal purposes.
- For the other charge that he pleaded guilty to, Cox defrauded Clearinghouse CDFI, which lent $1.5 million to the Central Valley Community Spots Foundation for upgrades to Fresno’s Granite Park complex.
- Cox submitted a fabricated board resolution indicating that all of the tax credit company owners agreed to guarantee the $1.5 million loan for Granite Park from Clearinghouse, when none of them actually agreed to do so.
- Court documents specifically single out a transaction from Clearinghouse worth over $600,000 in February 2017.
The backstory: Cox had been working on a plea deal with the federal government for years but requested several court hearings be delayed to give him more time to read through tens of thousands of pages of documents presented by the government.
- He last appeared in court in September for a hearing that was scheduled for him to take a plea deal, but Cox requested a hearing for Wednesday to obtain a date for trial.
- Cox filed for Chapter 7 bankruptcy in October, reporting nearly $2.5 million of liabilities with $760,000 in assets.
