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Ex-Oregon congressman Wester Cooley sentenced to prison in tax fraud

December 11, 2012 | 11:42 am

A former Oregon congressman has been sentenced in Los Angeles to a year and a day in prison in a tax fraud case involving an online auction site.

U.S. District Judge Dean D. Pregerson also ordered Wester Cooley on Monday to pay about $3.5 million in restitution to the victims and roughly $138,000 in back taxes to the Internal Revenue Service. Cooley, 80, will begin serving his term in March, the U.S. attorney's office said.

Cooley, who represented Oregon's 2nd Congressional District from 1995 to 1997, and two associates were accused of taking more than $10 million from about 400 investors who bought private stock in the Tujunga-based Bidbay and other companies.

Cooley, who was Bidbay's vice president, was charged with seven felonies in the case, but pleaded guilty to a single tax fraud charge in November 2011 as part of a deal with prosecutors. He said he received about $1.1 million from the scheme and didn't report about $494,000 in income on a 2002 tax return.

Prosecutors said Cooley, former IRS agent George Tannous and De Elroy Beller Jr. falsely told investors they would make money off the stock because Bidbay was about to be acquired by EBay. But EBay "never had any intention of acquiring Bidbay," the U.S. attorney's office said, and had even sued the company for trademark infringement because it used "bay" in its name.

Tannous pleaded guilty to conspiracy and tax fraud and was sentenced in March to nearly three years in prison, prosecutors said. Beeler pleaded guilty to conspiracy and mail fraud and is scheduled to be sentenced in February.

Cooley was previously convicted of making false statements about his military record in an Oregon voter guide. The Los Angeles native currently lives in Bend, Ore., prosecutors said, but was living in Palm Springs when charges were filed in 2009.

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— Kate Mather

Follow Kate Mather on Twitter or Google+.

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