It came as absolutely no surprise to me that so-called financial guru Wade Cook and his wife Laura were recently convicted of income tax evasion and sentenced to jail, according to an Associated Press report.
Wade Cook became really annoying some years ago by seeking to peddle his financial advice on his theory and accompanying books, tapes, seminars and associated crap to me and a lot of other unsuspecting potential investors.
Crap is the right choice of word as his financial advice has proven worthless. I never bought his stuff but thousands of other investors did.
Cook was nothing more or less than a cab driver who decided to get rich by preying on people looking for an easy solution to becoming rich.
He wrote three get-rich-quick books on his “meter-drop” theory of investing: Wall Street Money Machine, Wealth 101 and Business by the Bible. Is it not amazing how hucksters always want God to endorse their business, products and shenanigans?
Cook conducted hundreds of seminars in the 1990s on asset protection, stock market investing, real estate acquisition and avoidance of income tax.
He was so good at the avoidance of income tax issue that he will now spend more than 7 years in prison for income tax evasion by defrauding the Internal Revenue Service.
U. S. District Judge Thomas Zilly of the federal court in Seattle ordered Cook to pay $3.75 million in back taxes on roughly $9.5 million of underreported income generated by sales of Cook’s financial advice books, tapes and seminars.
It is one thing to render a financial judgment and another to collect it. It was not reported whether Cook ponied up the $3.75 million.
I do not know if Cook is penniless today, filed for personal bankruptcy, buried what money he had, placed his stash in a Swiss bank account or has millions in a petty cash account to pay his $3.75 million judgment for tax evasion.
I do know that he and his wife are dishonest, not to be trusted, will knowingly lie, cheat and steal to get ahead in this world, and know little about any kind of investing worth talking about. I knew all of that in the early 1990s when they started.
They apparently made millions selling their story to unsuspecting buyers and then not paying taxes on some of their revenue. Some pundits estimated Cook’s net worth at more than $200 million when he was flying high.
He was convicted in February 2007 for tax evasion, filing false returns and obstructing justice. The jury was deadlocked on all counts against his wife Laura who kept his books.
In May 2007 she pleaded guilty to obstruction of justice rather than face a new trial. She was sentenced to 1.5 years in prison. Laura Cook admitted that she created documents to evade taxes on income she and her husband received between 1998 and 2000.
The Associated Press reported that the Cooks said that they had loaned themselves money from a trust that was supposed to become a gift to the Church of Jesus Christ of Latter-day Saints.
Government lawyers said that the couple never intended to repay the money, thus it was taxable income rather than loans.
Cook’s lawyers argued that they were unable to repay the loans mostly because of the stock market collapse in 2001. Cook was apparently such a brilliant financial guru that he lost his fortune in a stock market collapse.
So much for Wade Cook’s theories on investing for profit and becoming rich in the process.
Cook shut down his operations in February 2003, a month after his publicly traded company-Wade Cook Financial Corporation of Tukwila (WA)-sought Chapter 11 bankruptcy protection.
Wade Cook and his wife Laura are only one of hundreds of hucksters who have traveled the country selling their crap (get-rich books, tapes and seminars) to unsuspecting investors.
(Editor’s Note: This is Part 1 of a 2-Part Series.)
Copyright © 2007 Ed Bagley