Former Fresno congressman to weigh plea deal

Court date for Terrance John "TJ" Cox set in May to hammer out details of plea bargain from the Department of Justice

Washington D.C., USA - February 29, 2020: Sign of United States
Darren Fraser
Published March 26, 2024  • 
1:00 pm

FRESNO – Former Congressman Terrance John “TJ” Cox has been offered a plea deal by the U.S. Department of Justice after being charged with 28 felony counts, including wire fraud, money laundering, financial institution fraud and campaign contribution fraud, all of which stem from an August 4, 2022 grand jury indictment.

A status conference for Cox, scheduled for March 27 at 1 p.m. in the U.S. District Court Eastern District of California, was postponed to May 22. This delay was to allow Cox’s attorney, Mark W. Coleman, time to review extensive court materials, including hundreds of thousands of pages of financial records and reports.

It’s not uncommon for such conferences to be rescheduled when a case involves a large volume of materials, according to a court spokesperson.

Details of the plea deal were not disclosed in the court’s March 20 order regarding the Speedy Trial Act.

Cox, a Democrat who served in Congress from 2018 to 2020, is accused of engaging in fraudulent activities over several years, including diverting funds from a company he managed, manipulating campaign contributions and involvement in a scheme related to a sports nonprofit.

According to an Aug. 16, 2022 press release from the Eastern District Court, if he is convicted, Cox faces a maximum of 20 years and a $250,000 fine for wire fraud and money laundering. He faces 30 years and a $1 million fine for wire fraud affecting a financial institution and for financial institution fraud. He also faces five years and a $250,000 fine for campaign contribution fraud.

TAX CREDIT COMPANY

According to the Aug. 4 grand jury indictment, on or about December 2013 and continuing to October 2019, Cox – through his company, the Tax Credit company – engaged in activities related to real estate development projects in disadvantaged areas eligible for federal funding. The Tax Credit company worked with the U.S. Treasury-regulated program called New Markets Tax Credit (NMTC).

The indictment notes that Cox’s scheme involved multiple moving parts, including both legitimate and illegitimate checking accounts. Cox’s role as a managing member of the Tax Credit company was to court lenders to provide funding for various construction projects. 

The scheme involved duping lenders and borrowers, with Cox diverting loans and wire transfers to his personal account at California Bank & Trust. He opened the account without the knowledge or approval from the other principals in the legitimate Tax Credit company.

Once this illegitimate account was up and running, Cox misdirected wire transfers to be deposited into it. He also deposited checks into this account that should have been deposited in the Tax Credit company’s bank account.

According to the indictment, Cox caused losses exceeding $1 million from borrowers and the Tax Credit company.

GRANITE PARK

In 2013, Cox and a business partner formed the Sports nonprofit. This enterprise operated an ice rink in Fresno. In 2015, the Sports nonprofit negotiated a 25-year lease from the city of Fresno for Granite Park, located at Cedar and Dakota Avenues.

In a quid pro quo agreement, the nonprofit paid the city $62,000 annually with credit for capital improvements. As per the agreement, the city promised the organization $150,000 to operate the park. Under the terms of the lease, the Sports nonprofit agreed to improve the park for recreational use.

In 2016, Cox and his business partner applied for a $1.5 million construction loan to develop the park. The lender wanted greater collateral than either Cox or his partner could furnish.

Cox fabricated a Tax Credit board resolution that indicated that all three Tax Credit company owners agreed to guarantee the $1.5 million loan.

In 2019, the Sports nonprofit defaulted on the loan. Cox left the Tax Credit company. The company agreed to purchase the debt due on the loan. Cox caused a loss of over $1.2 million in fraudulently obtained loans.

TJ COX FOR CONGRESS

The Federal Election Campaign Act of 1971 (Election Act) established limits on donations to federal campaigns. For the years 2017 and 2018, the Election Act limited primary and general election campaign contributions to $2,700, with a maximum of $5,400 from any individual to one candidate.

According to the indictment, on or about September 2017, Cox gave his own money to adult members of his family. The family members then made the maximum contribution allowable by law to Cox’s campaign. Cox withdrew $20,000 from the personal account he created under the Almond Processing company, which he joined in 2012, and deposited money into each family member’s bank account.

In November and December 2017, Cox repeated the scheme, this time relying on business associates to make maximum campaign contributions.

From September 2017 through December 2017, Cox donated more than $25,000 to his own campaign using others to make the contributions.

ALMOND PROCESSING COMPANY

In 2012, Cox joined the Almond Processing company as a partial owner. The Secretary of State’s website lists companies with variations on the name but does not list an entity with that precise name.

According to the indictment, Cox’s role at the company was to attract potential investors. Instead, Cox began operating under the company’s radar. In April 2015, he opened an account at Wells Fargo under the name Almond Processing company. The other owners did not know of this account’s existence, the purpose of which was to divert money from and intended for the legitimate company.

Over the next few years, Cox orchestrated ruses to obtain money that he used for personal expenses or for his other businesses.

By the time he had finished with the Almond Processing company, Cox had caused over $750,000 in losses to investors and to the company.

Darren Fraser
Reporter