California politician used BART cafes in fraud scheme

According to the Justice Department’s Northern District of California, last week a former California lawmaker pled guilty to a seemingly unlikely money laundering scheme in which he promised to build Peet’s Coffee cafes in San Francisco BART Stations.

Terrence Patrick Goggin, a Souther California Democrat who represented the San Bernadino area in the state assembly from 1974 to 1985, admitted to a single money laundering charge related to the coffee-centric scheme he brewed up.

In November 2018, a federal grand jury indicted Goggin on a more expansive list of four counts of wire fraud and nine counts of money laundering. At the time, Justice Department attorneys stated that he faced up to 20 years in prison.

In 2013, Goggin told investors that he was planning to build two Peet’s cafes, one at Balboa Park Station and another at Civic Center Station. Bay Area commuters will notice that those locations never manifested.

Instead, the politician turned lawyer now admits he kept the nearly $700,000 raised for himself and tried to fund other (unsuccessful) ventures with it.

The cafe scheme probably seemed plausible at the time, because Goggin really did have a deal with BART to open Peet’s locations at stations, and he had previously opened four cafes including two in SF—one at Montgomery and one at Embarcadero.

In 2018, BART spokesperson Jim Allison confirmed that the transit agency did business with Goggin’s MC2 cafe business, but said that the company went out of business in 2015 and the permits for the cafes passed on to another vendor.

The United States Sentencing Commission says that the average sentence for money laundering was 65 months in 2018. Goggin could serve up to ten years, although having no prior convictions he’s likely to receive a lighter sentence.