Feds Say Cox Laundered Campaign Contributions Through Family Members
After TJ Cox emerged from the Fresno County Jail on Tuesday, he said that his arrest on 28 federal fraud counts was politically motivated.
“Politics is a tough game. I wouldn’t be in this position today but for the politics, and I think we all know that,” said the former Fresno Democratic congressman.
The Department of Justice declined to comment on Cox’s allegation.
But the grand jury indictment of Cox speaks volumes about the accusations he’s facing.
In painstaking detail, the 25-page document paints a picture of an alleged grifter bilking investors, lying to lenders, and stealing money from companies he’s been involved with.
He is also accused of campaign finance fraud in a scheme to enhance his credibility as a candidate in the 2018 congressional race. The scheme, according to the indictment, involved family members and business associates.
Cox pleaded not guilty to all charges on Tuesday. He returns to court in October. If convicted, Cox faces a prison sentence and potentially heavy fines.
Here is an easy-to-understand breakdown of the government’s allegations along with new details uncovered by GV Wire:
Family Allegedly Involved in Campaign Fraud
Cox faces a single count of campaign fraud for the 2018 campaign in which he unseated incumbent David Valadao, R-Hanford. Valadao won a 2020 rematch.
The federal government accused Cox of using his own money to pay others to contribute to his campaign. Making a contribution in the name of another is a violation of federal law.
In September 2017, the indictment alleges Cox distributed $20,000 to three family members who, in turn, gave to the campaign.
Federal Election Commission records show the names of Ian Cox, Kevin Cox, and Perla Davis — all Nevada residents — giving the maximum contribution of $5,400 (through two $2,700 contributions each) each for that time period.
TJ Cox does have brothers named Ian and Kevin; Perla Davis is his mother’s name. Ian Cox did not have a comment when reached by GV Wire.
The indictment also said Cox distributed money to “Business Associate #1” who contributed $5,400 in late December 2017. The first associate provided money to “Business Associate #2” who contributed $2,700.
Several contributors donated that amount during that time period, many with business ties to Cox. GV Wire spoke with one of them — Brandon Bullett, the head strength and conditioning coach for the Fresno Monsters junior ice hockey team.
Records show Bullett gave the Cox campaign $2,700. He said he cooperated with the FBI, but would not confirm or deny details. The president and owner of the team, Jeff Blair, contributed $5,400 in that time frame.
Nonprofit Money Used for Illegal Campaign Contribution: Indictment
Blair did not have much to say about the contribution when asked by GV Wire. Blair also works as an executive for the nonprofit sports foundation founded by Cox — Central Valley Community Sports Foundation — an organization prominently mentioned in the indictment.
Cox is also accused of paying a family member $11,000 — from the CVCSF account — and adding the name of an unnamed “Individual #1” to the check without that person’s knowledge. Cox’s campaign finance statement then listed “Individual #1” as having given the maximum allowable contribution, according to the DOJ indictment.
Why would Cox distribute money for others to convert to contributions instead of simply loaning money to his campaign directly?
The indictment said Cox wanted to increase the number of donors listed on his report to bolster his campaign.
“The number of private donations received by TJ Cox for Congress in the third and fourth quarters of 2017 assisted Cox in seeking election and receiving political party support,” the indictment said.
DOJ Outlines Scheme Involving Cox-Owned Companies
The indictment laid out an alleged scheme Cox engaged in at two companies he owned, where he would set up a dummy bank account to make it look like it belonged to the company.
Cox founded Central Valley NMTC Fund, LLC in 2010 with two partners. The company helps provide tax-credit-based financing to entities wanting to build in low-income areas.
The former congressman also invested in an almond company. While the company is not named in the indictment, Cox’s financial disclosures from his time as a congressman from 2019-2021 show he was a manager for California Custom Processing LLC in Madera.
With both companies, Cox is alleged to have deposited money meant for his company into his own account. The indictment said Cox instructed a healthcare company dealing with his tax credit company to wire $324,000 to his dummy account instead of the correct company account.
The indictment also describes Cox misusing a $100,000 investment in the almond company by two former business associates. Instead of depositing the money into a corporate account, Cox deposited the funds into his own account and used the proceeds for credit card payments, mortgage payments, private school tuition, and paying a political consultant, according to the Department of Justice.
Cox allegedly caused losses of $1 million to the tax credit company and $750,000 to the almond processor.
He faces 21 counts of wire fraud and money laundering for the alleged schemes.
Cox Accused of Lying to Lenders Twice
The indictment says Cox lied to lenders on at least two occasions, once for a home loan, and once for a construction loan at Granite Park.
Cox’s nonprofit CVCSF entered into a lease agreement with the city of Fresno in 2015. The city agreed to provide a $150,000 annual subsidy to rehabilitate and operate the dilapidated recreational facility.
The nonprofit applied for a $1.5 million loan with Clearinghouse — a lender that specializes in loans for projects in low-income areas. The lender required a guarantor of the loan. Cox offered his tax credit company.
The lender believed Cox secured the necessary permissions from his Central Valley NMTC Fund partners — the indictment said Cox only had the power to unilaterally spend $50,000. He allegedly faked approval from his partners for the loan.
During the course of the investigation, Central Valley NMTC Fund cooperated with the FBI, GV Wire has learned.
The sports foundation defaulted on the loan in 2019, forcing Central Valley NMTC Fund to pay off the note. Recently, the company requested the city of Fresno to reimburse it for the loan.
The Fresno City Council considered the request in two closed session meetings. No decision was made.
Cox left both the tax credit company and CVCSF when he served in Congress from 2019-2021.
Alleged Fraud Involving House Purchase
Cox also allegedly lied to a lender when buying a home in northwest Fresno in 2017. The indictment said, “Cox offered to buy the house from his business partner for the purpose of renting it out to another one of his business partners.”
The indictment said Cox lied about his income (inflating it by $100,000), was not honest about the true price of the home, and said the home would be his primary residence when his true intent was to rent it out.
Cox also sent the bank false statements about renting his current home to another business associate, the indictment says.
Records from the Fresno County Recorder’s office and a real estate database show Cox bought the home in 2017 for $350,000 and sold it 18 months later for $465,000.
The sellers were Joseph Rossi and his wife, Cinda Rossi. Joseph Rossi told GV Wire he and Cox were partners in the almond company.
“Well, I feel sorry for him,” Rossi said of Cox’s arrest this week.
Rossi said he was in the dark about Cox’s alleged fraud with the bank.
“I didn’t know (the documents provided) were fraudulent. He had told me that he was going to move there, and that was the extent of it. Then I guess he changed his mind,” Rossi said.
Rossi said he was paid more than the purchase price listed of $350,000. He said he was unaware of how Cox financed the purchase.
Regarding any conversations with federal authorities, Rossi said “that’s between us and the FBI agents.”