From Congress to Prison for Former Politician

By Teresa Ambord

Wester Shadric Cooley once belonged to the House of Representatives as a congressman from Oregon's second district. That was back in 1995-1997 when he served one term. A lot has happened since then, and most of it hasn't been good. In early December 2012, he was found guilty of tax fraud, along with two accomplices, for bilking investors out of millions of dollars. 
 
Here's what happened 
After leaving Congress, Cooley served as vice president of a Tujunga, California-based online auction company known as Bidbay.com, Inc (later known as Auctiondiner.com). An investigation by the FBI and the IRS-Criminal Investigation unit revealed that Cooley, along with former IRS agent George Tannous and convicted felon De Elroy Beeler Jr., made false statements to investors about the future of Bidbay. The FBI said in a press release that the men solicited investors from across the country to purchase unregistered stock in Bidbay and two related companies, AskGT.com and Rose Laboratories. 
 
The eBay connection
Cooley, Tannous, and Beeler told investors that Bidbay was about to have an initial public offering. They also floated the story that eBay was interested in acquiring Bidbay for $20 a share, which would result in high profits for the stockholders. Approximately 400 investors paid about $10 million for private stock in Bidbay and other companies. 
 
The truth was that eBay "never had any intention of acquiring Bidbay," said the US Attorney's office. In fact, eBay was suing the company for trademark infringement based on the use of "bay" in its name. 
 
In 2009, Cooley was charged with seven felonies, but in November 2011, he pleaded guilty to a single charge of tax fraud for subscribing to a false tax return in order to cut a deal with the prosecution. According to his plea, he received roughly $1.1 million from the scheme, but he failed to report $494,000 of that on his 2002 tax return. 
 

There's more on AWEB!

Do you have colleagues or clients who might like to receive the free AccountingWEB newsletter?
• Practice
• Education
• Tax
• A&A
• Technology
• Wealth Management

On December 11, 2012, US District Judge Dean D. Pregerson ordered Cooley to pay $3.5 million in restitution to his victims as well as about $138,470 in back federal taxes. In March 2013, the eighty-year-old former politician will begin serving one year and one day in prison for his crimes. 

 
Tannous had entered a guilty plea in 2008, and in March 2012, he was sentenced to thirty-three months in prison, according to the FBI. Beeler also pleaded guilty in 2008 to conspiracy and mail fraud and will be sentenced in February 2013.
 
This isn't Cooley's first legal problem. At one time, he was convicted of making false statements about his military record in an Oregon voter guide. He's currently a resident of Bend, Oregon. At the time charges were filed in the Bidbay case, he was a resident of Palm Springs, California.
 
Related articles:

 

You may like these other stories...

Renaissance avoided more than $6 billion tax, report saysThe Senate Permanent Subcommittee on Investigations said on Monday that a Renaissance Technologies LLC hedge fund’s investors probably avoided more than $6...
A new Gallup survey found that 58 percent of smokers in the United States see increased state and federal taxes on cigarettes as an act of unjust discrimination, while 39 percent believe the tax hikes are justified.The...
Liberal groups object to bill barring taxes on Internet accessThe Internet Tax Freedom Act hasn’t been a controversial bill. In fact, it’s so popular that senators are seeking to pair it up with a far more...

Upcoming CPE Webinars

Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.