(CN) – Federal prosecutors say a former congressman pocketed $1.1 million of investors’ money while he was vice president of the online auction site Bidbay.com, and failed to report it on his taxes. Wester Cooley, 76, of Palm Springs, Calif., represented Oregon’s 2nd district from 1994 until 1996. He was convicted in 1997 of lying in a voter information pamphlet by falsely claiming to have served in the Army Special Forces in the Korean War.
The seven-count indictment in Los Angeles claims Cooley and “co-schemers” George Tannous and De Elroy Beeler Jr. defrauded “hundreds of victims across the country” of more than $10 million by selling unregistered stock through false claims that the company was going to be acquired by Ebay, the U.S. Attorney’s Office said.
In fact, Ebay had no such intentions and had previously sued Bidbay.com over the use of “bay” in its name, according to the U.S. Attorney.
Tannous and Beeler pleaded guilty to the scam in 2008 and await sentencing.
Cooley, a Republican, faces up to 38 years in prison if convicted of all charges.
Cooley was convicted in 1997 of lying in a voter information pamphlet by claiming to have served in Army Special Forces in the Korean War, The New York Times reported at the time. Cooley, then 64, was sentenced to probation and community service.
Cooley also was dogged by allegations that he concealed the actual date of his marriage so that his wife could continue collecting benefits as the widow of a military pilot.