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Texas Asset Protection News
Asset Protection Guru Charged With Tax Fraud
Prominent Fall City Couple Concealed More Than $8 Million to Avoid Taxes
WADE B. COOK, 56, an advocate and teacher of asset protection, stock market investing, real estate purchasing, and avoidance of income taxes, and his wife, LAURA M. COOK, 52, were charged today in Federal Court in Seattle with eight counts of tax fraud, conspiracy, and obstruction of justice. The crimes charged carry maximum penalties of three to fifteen years per count, fines of between $100,000 and $1,000,000, and costs of prosecution. According to court papers, this case arose from WADE COOK's operation of Wade Cook Seminars, a wholly owned subsidiary of Wade Cook Financial Corporation, a publicly traded company. As part of that business, WADE COOK organized and lectured at hundreds of seminars on a wide range of financial and asset protection topics. COOK authored many books including Wall Street Money Machine, Wealth 101, Brilliant Deductions and Business by the Bible.
The criminal charges focus upon tax returns WADE and LAURA COOK filed for years 1998, 1999 and 2000. In each of those years they reported adjusted gross incomes of approximately $350,000. The charges indicate they did not report, and willfully concealed, receipt of approximately $8.9 million in royalties from WADE COOK's many books and seminars despite using such funds for their personal benefit. By not disclosing those royalties on their tax returns they received and utilized those monies tax free. As part of the tax fraud WADE and LAURA COOK created a fictitious limited partnership, called Never Ending Wealth, LP (NEW), which was in turn ostensibly owned by a type of tax exempt entity called a charitable remainder trust.
Purportedly, the trust was for the benefit of the Mormon Church. In truth, the trust was simply a vehicle for WADE and LAURA COOK to fraudulently conceal their royalty income and spend it as they wished. No funds were left in the trust for the church. The criminal charges include a count of obstruction of justice relating to the COOKs' effort to recharacterize their use of the royalty funds, after the fact, as loans. Criminal charges are only allegations. Defendants are presumed innocent until proven guilty beyond a reasonable doubt at trial.
A Living Trust is an entity created for the purpose of holding and managing assets
A Living Trust is an entity created for the purpose of holding and managing assets for the benefit of the creators of the Trust (the “Trustors”) during their lifetimes and then for the purpose of management and distribution of the assets to the beneficiaries designated by the Trustors. There are various reasons for creating Living Trusts: (a) To avoid probate administration on death of either Trustor. (b) To avoid a court supervised conservatorship in the event of lifetime disability of either Trustor. (c) To provide for the management and distribution of assets during continued administration of the Trust or upon its termination.
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Definition:
To hold the protected assets. The stock in this tax exempt entity can be held by an asset protection trust. As a result, the stock does not show up on the balance sheet of the taxpayer and the income from the assets is likewise off the tax return of the protected client.
Bonds
Definition:
Essentially loans or debt. When someone lends you money, he or she gets an IOU that promises the loan will be repaid with interest. When you buy a bond, you're basically buying that IOU. A bond certificate is like an IOU: it shows the amount loaned (principal), the rate of interest to be paid on the loan and the date that the principal will be paid back (maturity date). Bonds can be issued by government agencies, such as the U.S. Treasury and by corporations to raise money.
Private mortgage insurance (PMI)
Definition:
Protection for the lender against a loss if a borrower defaults on a loan. It is usually required for loans in which the down payment is less than 20 percent of the sales price or, in a refinancing, when the amount financed is greater than 80 percent of the appraised value.
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