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Another Asset Protection Scammer Bites the Dust (Maybe!).

By Rob Lambert - Email Editor

Date: Dec 08, 2005

I have consistently warned my readers to RUN from any Asset Protection expert who:

(1) Promises to save them substantial taxes as part of the planning;

(2) Are offering investment advice as part of their Asset Protection services;

(3) Are primarily engaged in the seminar business; or

(4) Base their Asset Protection advice on the use of stealthy “now you see it, now you don’t” Nevada Corporations.

Wayne Cook fit the bill on all four counts, yet still managed to make millions.

Last week, the self-proclaimed Asset Protection guru, Wade B. Cook, and his wife were charged in the U.S. District Court in Seattle with eight counts of tax fraud, conspiracy and obstruction of justice.

Wade Cook was famous (or infamous) for conducting seminars on Asset Protection, stock market investing, real estate acquisition and avoidance of income tax. His books include "Wall Street Money Machine," "Wealth 101" and "Business By The Bible."

The criminal charges arose from Cook's operation of Wade Cook Seminars, a subsidiary of Wade Cook Financial Corporation.

In tax returns filed for 1998, 1999 and 2000, the Cooks reported adjusted gross incomes of about $350,000 annually. The prosecutors contend they concealed over $8 million in royalties from Wade Cook's books and seminars over the three years.

According to the charges, the Cooks created a fictitious limited partnership, called Never Ending Wealth LP, which was supposedly owned by a tax-exempt entity known as a charitable remainder Trust that was purportedly established to benefit the Mormon Church.

This is not the first time that Wade Cook has gotten into trouble. Here are a few reported examples:

• In 1998, the Illinois Attorney General's Consumer Fraud Division launched a formal investigation to find out if Cook's company engaged in illegal and fraudulent activities.

• In 1999, a lawsuit was filed by the California Attorney General's office. In seeking millions in refunds for people who had taken the Cook seminars, the Attorney General alleged that the firm made misleading promises and ignored the state's three-day refund law.

• In March of 1999, the Attorneys Generals in nine states opened investigations to determine whether Wade Cook Financial or its subsidiaries have engaged in business and advertising practices that violate consumer protection laws.

• In 2002, the Federal Trade Commission sought a civil contempt order against Wade Cook charging him with, among other things, having failed to disclose the current rate of return for his stock trading investments, substantiating promotional claims, and making redress payments to compensate eligible customers who did not make more money trading stocks than they had paid to attend the workshop. The FTC also sought civil contempt against several entities related to Wade Cook Seminars, Inc.

I know for a fact that many people lost money following the advice of Wade Cook.

You never need to be the victim of a shady promoter. Simply stay away from any Asset Protection expert who meets any of the four criteria mentioned in the first paragraph of this newsletter. In addition, always check references and NEVER EVER go with anybody who asks you to “TRUST ME,” or indeed, even a foreign trustee.

Wade Cook made it sound so easy. He told people that, by using his program, they could double their money in a few months of trading stocks. This is all well and good. But one well-known stockbroker pointed out if Mr. Cook could really double his money every three months, in five years time he would have had tens of billions of dollars if he started with $100,000.

I’d like to clarify a few things:The best Asset Protection planners DO NOT spend a lot of their time conducting seminars. Some do, but maybe a few times a year. Wade Cook made his millions doing just this.

If you want to protect your assets, go to a qualified Asset Protection planner. Talk to your attorney or accountant (or both) to find the best one to serve your needs and make sure you involve your attorney and accountant in the process.

And, most important of all, remember the old saying “If it’s too good to be true, it probably is.” That still rings true and applies in this case.

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