Former Democratic Rep. T. J. Cox of California was arrested by FBI on charges connected to financial fraud, Politico reports. The former congressman was charged with 15 counts of wire fraud, 11 counts of money laundering, one count of financial institution fraud, and one count of campaign contribution fraud, the Justice Department said. The indictment says that Cox fraudulently obtained a $1.5 million construction loan to develop a recreation area in Fresno, Ca., by falsely representing it would be guaranteed. The loan later defaulted and prompted a loss of more than $1.28 million.
Cox is accused of using a cluster of business entities to supplement himself while saddling business partners with losses. Cox allegedly funneled money into secret accounts and used it to pay off his own debts, cover his personal costs, and fund political ambitions. He allegedly fabricated a board meeting to secure loan funding and lied on a mortgage loan application. Cox was accused of participating in “multiple fraud schemes” over a number of years, receiving over $1.7 million in diverted client payments and company loans and investments through off-the-books bank accounts. Cox used some of the diverted money to fund his campaign for Congress. He did this by allocating $25,000 among his relatives and associates to increase his position in the race, because public opinion generally prefers donations over personal loans or contributions of a candidate. Cox narrowly unseated then-Republican Rep. David Valadao in the battleground district before losing a rematch to Valadao in 2020.