When will they learn? Otherwise educated, smart and very wealthy Americans continue to hide money offshore in an effort to evade taxes. And the U.S. Department of Justice and IRS Criminal Investigations Division continues to find and prosecute these folks. Whistleblowers who report these schemes are eligible for large cash rewards.
On Thursday January 16th, 66 year old Jeffrey Cooley was sentenced to one month of incarceration and fined $210,000 for filing a false tax return. The sentence and fines were minimal but Cooley is now a convicted felon. As to the fine, what he pays the court is separate from what he must pay the IRS and the civil penalties for offshore tax violations are off the charts! Was it really worth it?
According to court records, Cooley was the global president of Newell Rubbermaid, a huge consumer brands company headquartered in Atlanta. The company makes and sells a wide range of products under popular brand names such as Rubbermaid, Calphalon, Marmot, Yankee Candle and Coleman.
Prosecutors said that in 2005 after his retirement from the company, Cooley purchased an offshore trust company named Southpac Trust, a British Virgin Islands company. That company was supposedly an asset protection company that owned a bank located in the Cook Islands.
Federal law requires U.S. citizens and green card holders to report their offshore financial holdings and file accurate returns. Having an offshore account isn’t illegal if properly reported and not used to launder money or evade taxes.
Prosecutors say that Cooley’s tax returns falsely claimed he purchased Southpac in 2012, some 7 years after he acquired the company. They also say he opened a bank account in Switzerland so that he could “covertly” receive the income from Southpac. To repatriate the money into the United States, Cooley would travel to Canada and withdraw the money from the Swiss account via debit cards.
In announcing the sentencing, Philadelphia’s United States Attorney said, “This case is an example of sheer greed. Cooley was already wealthy through his earnings as the president of a globally recognized company, but that simply wasn’t enough for him. Instead, he felt the need to cheat in order to line his pockets through fraud. He invested in a company and then went to great lengths to hide that investment so he wouldn’t have to pay his fair share of taxes. That was an intolerable affront to every honest American taxpayer.”
If there is any silver lining in this case, Cooley was wise enough to cooperate when caught. His cooperation probably saved him from a lengthy prison sentence. Unfortunately, he is still left with the stigma of the conviction. After a long and successful career, he is now a convicted criminal. Hopefully others will learn from his experience.
IRS Whistleblower Program and Cash Rewards
How did Jeffrey Cooley get caught? The IRS isn’t saying. In our experience*, many offshore tax cheats are caught because of whistleblowers. No one likes paying the IRS. And everyone understands that some folks can’t pay because of illness or loss of a job. If there is one thing that everyone dislikes even more than paying taxes, however, it is those who cheat the system and refuse to pay their fair share. That is how we view Jeffrey Cooley.
The IRS Whistleblower Program allows those with inside information about tax fraud to report those who wrongfully fail to properly file returns or pay taxes. The IRS can pay rewards of up to 30% of whatever monies are collected by the IRS from the wrongdoer. That includes interest and penalties too!
In most instances, the identity of the whistleblower is kept confidential.
To learn more, visit our offshore tax fraud whistleblower rewards claims page. To see if you qualify for a reward, contact us online, by email or by phone 202-800-9791. We take IRS whistleblower cases anywhere in the world. All inquiries are protected by the attorney – client privilege and kept confidential.
*Attorney Brian Mahany is a former tax prosecutor. Our whistleblower team includes former prosecutors and special agents. We know how to present a case so that the IRS takes interest.