Federal Jury Indicts Former California Assemblyman in Coffee Shop Fraud Case

A Peet’s location proposed for the Balboa Park BART station (pictured) was identified in the federal indictment. CC BY-SA 3.0.

A federal grand jury in Oakland has indicted a former California state assemblyman and coffee retail company CEO with four counts of wire fraud and nine counts of money laundering.

Terrence Patrick “Terry” Goggin, age 76, is accused of diverting private equity investments originally made for coffee-related business to non-approved business dealings in New York, and to a girlfriend in Thailand, according to the U.S. Attorney’s Office. The indictment follows an investigation by the FBI and the criminal division of the IRS.

Goggin, a licensed attorney, represented San Bernardino as an assemblyman from 1974 to 1985. According to prosecutors, he is formerly the CEO of Metropolitan Coffee & Concessions, known as MC2, which operated multiple Peet’s Coffee & Tea franchise locations in Bay Area Rapid Transit (BART) stations, with permits to expand its business into other BART stations. A 2008 press release from Peet’s says that MC2 was planning to operate eight BART station locations.

Prosecutors say that in 2013, Goggin solicited and obtained money from private equity investors to fund the build-out of Peet’s stores at the Civic Center and Balboa Park stations. Goggin then diverted the money to other non-approved projects, including a now-closed New York restaurant called Preserve 24, according to the indictment. That restaurant closed in 2014 after an eviction.

Prosecutors also allege that Goggin used his authority at MC2 to direct employees to transfer investor money inappropriately, and that he used investor funds to support his “personal spending,” including thousands of dollars to a girlfriend in Thailand.

Goggin is currently awaiting a bail hearing scheduled for Dec. 5.