The federal indictment accuses Cox of using a group of business entities to enrich himself while dealing with loss-making business partners. The document describes a scheme in which Cox siphoned money into secret accounts and used the proceeds to pay off his own debts, cover personal costs such as private school tuition and finance his political ambitions. He allegedly fabricated a board meeting to secure loan funding and lied on a mortgage loan application.
In a statement, the DOJ said the California Democrat allegedly engaged in “multiple fraud schemes” over several years. Between 2013 and 2018, he allegedly obtained “more than $1.7 million in diverted client payments and business loans and investments” through off-the-books bank accounts.
According to the federal government, some of the embezzled money went to Cox’s successful campaign for Congress. The indictment describes Cox distributing $25,000 to family members and business associates who could then donate to his campaign. Cox narrowly unseated then-Rep. David Valadao (R) in the Battleground District before losing a rematch against Valadao in 2020.
According to the indictment, Cox tried to channel the money through allies in order to leverage his position in the race, as public opinion generally prefers donations “over personal loans or donations to the candidate.”
“The purpose of emphasizing individual donations was to keep pace with competitors who received large numbers of private donations and to show the viability of the candidacy through individual donations,” the indictment says.
The indictment further alleges that Cox fraudulently obtained a $1.5 million construction loan to develop a recreation area in Fresno, California, by falsely representing that it would be guaranteed. The loan later defaulted, resulting in a loss of over $1.28 million.
After narrowly losing his 2020 rematch with Valadao by about 1,500 votes, Cox considered running again in 2022, but ultimately endorsed Rudy Salas (D) for the congressional seat.
Salas distanced himself from Cox on Tuesday after the accusation: “TJ Cox has disgraced himself,” he said in a statement.
Tax and pay issues dogged Cox during his time in Congress. The former legislator owed $145,000 in unpaid federal income tax in early 2020, prompting the Internal Revenue Service to place a lien on him and his wife.
Requests for comment from Cox, his former chief of staff and the Fresno County Sheriff’s Office were not immediately returned.