Washington Post, Meet the Black-Belt, Tattooed IRS Official Who Saved 23 Children From Their Abusers:
At an early-morning Brazilian jujitsu class in Hamburg, N.Y., sweat flies as men pair off and pounce on each other, grappling and grunting on the mats. The fighters are so entangled that it’s hard to tell which hand or foot belongs to which body. Jarod Koopman, the black-belt instructor, pins a student named Mike to the floor and with a shift of his hip renders him immobile. Mike weighs 280 pounds; Jarod, 180. Brazilian jujitsu was created to do this: enable a smaller person to bring down a much bigger one.
Koopman teaches this class about three times a week, then changes out of his heavy cotton gi into the business shirt and pressed slacks of a professional accountant. When he sits down at his computer, what he will do at work is much the same as what he does at the dojo. This work has, among other things, led to the rescue of 23 children from rape and assault, the seizure of a quarter-million child abuse videos and the arrest of 370 alleged pedophiles. It has resulted in the largest-ever seizure of cryptocurrency headed to Hamas, al-Qaeda and the Islamic State. When Changpeng Zhao, chief of the world’s biggest cryptocurrency exchange, Binance, reported to prison in June, it was because Koopman’s small cybercrime team had uncovered evidence of the firm’s money laundering for terrorists and sanctions-busting for Iran, Syria and Russia. In the past 10 years, this work has returned more than $12 billion to victims of crime and to the U.S. Treasury.
If he worked anywhere else, Koopman would probably be celebrated. But he’s employed by the Internal Revenue Service, the arm of government that even its commissioner, Danny Werfel, describes as “iconically unpopular.” Werfel opens his public presentations with a clip from “The Simpsons” that pretty much sums up Americans’ attitudes to his agency: From a taxi barreling down Constitution Avenue, Marge points out huge letters marking the IRS headquarters. Homer leans out the window and boos. …
[P]erhaps most despised are the 3 percent of IRS personnel involved in criminal investigation, who have become piñatas for the agency’s critics. Fox News’s Brian Kilmeade characterized agents such as Koopman as dangerous threats who could “hunt down and kill middle-class taxpayers,” while Rep. Lauren Boebert (R-Colo.) accused them of “committing armed robbery on Americans.” Republicans even attached a rider to a spending bill limiting the number of bullets the IRS can buy. “A weapon is rarely discharged by one of our agents,” says a frustrated Werfel. “But you can’t send an agent into a criminal enterprise unarmed, so they have to train, and there’s a minimum inventory required for that.”
At his home in Upstate New York, Koopman keeps a slew of hunting guns, his Glock service weapon and a few personal-carry pistols. He’s a certified firearms and defensive tactics instructor. Mounted deer and elk heads on the walls of his garage testify to his marksmanship. But he has never had to fire a gun on the job in his nearly 23 years as a sworn law-enforcement officer for the IRS. …
I am a novelist; I make things up for a living. In my trade, it would be considered malpractice to make up Jarod Koopman. You just do not give your protagonist a set of attributes that includes black belts, vintage trucks, sommelier certificates, tattooed biceps, a wholesome, all-American rural family and a deeply consequential yet uncelebrated and under-remunerated career in global cybercrime. But as Mark Twain said: “Fiction is obliged to stick to possibilities. Truth isn’t.”
It was through a fellow accounting student at Nazareth that Koopman found his calling. “I knew she had an internship with the IRS, and she came back to the dorm one day saying she’d just accompanied a team executing a warrant on a drug dealer, and I’m like, wait, the IRS does that?” He’d always been attracted to a career in law enforcement, and here was a job that could couple that ambition with his accounting skills. Koopman applied for the internship his senior year and was hired into the Rochester field office after he graduated in 2001. His early cases were white-collar crimes such as investment fraud and Ponzi schemes. “I’m 20 years old, sitting across the table from people in their 80s who are crying because they’ve trusted someone with their hard-earned retirement savings, and they’ve lost everything. You want to get the person responsible for that.”
And he did, sleeping in the office some nights, winning notable convictions and being plucked from the ranks for accelerated leadership training. He rose rapidly — from field agent to supervisor in Rochester, assistant special agent in charge in Manhattan, senior analyst in D.C., assistant special agent in charge in Chicago, special agent in charge in Detroit. He liked working cases — “I was never getting into management.” But he’d had five big cases that had gone to trial back-to-back, “so when they asked me to sit in a chair for a few months in an acting supervisory role, I felt like I could use the break. I found it much more satisfying than I’d imagined.” He enjoyed using his experience to help other agents advance their investigations, having the clout to get them the resources they needed, protecting them when bigger agencies wanted to swoop in and take over their cases. …
It would be 2014 before the IRS issued its first notice on virtual currency, stating that profits on crypto would be taxed as capital gains, and the next year Koopman was tasked with building out what would become the cybercrime unit of IRS Criminal Investigation. Janczewski had transferred to D.C. and was already working cybercrime cases. Koopman moved from Detroit to head the new unit, which was not at IRS headquarters but in a corner of a bland downtown office building way over on First and M Northeast. “There were only about three of us, building a castle out of toothpicks,” Koopman recalls. The government sprang for high-powered computers, but the agents had to pass the hat for a coffeemaker. “It wasn’t on the approved list for procurement.”
The cybercrime unit remains a minnow in the bright wake of whales such as the Federal Bureau of Investigation, the Drug Enforcement Administration, Homeland Security and others that have the door-kickers in the tactical gear, the ones in the television lights after a big bust. But often it is an IRS cybercrime agent who uncovers the critical evidence in big, multiagency cases, even if they don’t always get the credit. This is nothing new for the IRS, which has a long history of being denied due kudos. Everyone knows that Al Capone was nailed for tax evasion, but it’s Eliot Ness and the FBI who are lionized. The real hero of that bust was an IRS agent named Michael Malone, who lived undercover with Capone’s men, collecting evidence for nearly three years.
Koopman has about 200 agents dispersed across the country and abroad. They work quietly in the glow of computer screens, painstakingly tracing blocks in ledgers of cryptocurrencies, finding suspicious clusters of transactions, checking time stamps against time zones to narrow down a suspect’s location, capturing IP addresses, looking for errors in code or mistakes with encryption, peeling back layers to reveal a name and unmasking bad guys. …
Although billion-dollar seizures are impressive, Koopman cites a different case as the team’s most consequential. In 2015, in a dingy apartment outside Seoul, a young man named Jong Woo Son set up a website called Welcome to Video from a server in his bedroom. The bland name concealed a vile purpose: selling videos of children, some as young as 6 months old, being sexually abused. The site attracted pedophiles from around the world, who either paid for the videos in bitcoin or traded for them by uploading images of child abuse they themselves committed. Koopman’s team was able to locate the server because Son had made a simple mistake. When an agent right-clicked on the homepage and selected “view page source,” embedded in the code was an IP address that the site’s administrator had neglected to conceal.
For Koopman, the case was personal — “My own kids were the same age” as some of the children being raped in the videos. Everyone worked around the clock, knowing that every minute the case remained unsolved, more harm was being inflicted on children. Janczewski flew to Seoul for the arrest, although South Korean law didn’t allow him to enter Son’s apartment. He sat outside in a car, remotely instructing local police about securing computer equipment containing essential evidence. The funds that were confiscated in that case are now being used to support the 23 children rescued from their abusers as a result of leads found on those computers. Of 370 suspects arrested, two turned out to be Homeland Security officers; another, an assistant principal at an Atlanta high school. Because of the irrefutable evidence, most pleaded guilty and went to prison. …
Since the cybercrime unit’s return on investment has been so spectacular in recent years, Koopman is finally getting the resources he needs to replace staff who leave for the richer pickings of the private sector. An agent’s pay tops out at about $130,000; salaries for people with their skills in the private sector are three or four times that, and conditions are way cushier. …
Danny Werfel, the IRS commissioner, returned to the agency from a leadership position at Boston Consulting Group. While he was in the private sector, he says, “I felt a bit like you do when you go overseas on vacation — it’s lovely, but it’s not home.” With funding provided by the Inflation Reduction Act, he is leading the IRS through what he believes is the most important tech-enabled transformation of a government agency in U.S. history. “My parents are in their 80s. They’ve never used an ATM. My kids are in their 30s and they’ve never been to a bank teller.” His mission is to align the IRS with the expectations of that younger generation, getting rid of cumbersome paper returns and slow refund payments. “That will unlock capacity to help the people who need help” — such as the 6 million people who are eligible for the earned-income tax credit but don’t claim it — “and scrutinize those who deserve scrutiny” — such as the 25,000 people earning more than $1 million a year who have gotten away with failing to file a return since 2017 simply because the IRS didn’t have the resources to go after them. …
The “false narrative” and “obtuse political talking points” around the IRS’s criminal investigations depress him. He wishes more people knew about the work Koopman and his agents really do — these tireless, dedicated people, working all hours, shutting down suppliers of fentanyl, saving kids, disrupting terrorists — sort of a nerdy SEAL Team Six. Oh, and as a byproduct of that work, making cryptocurrency a safer space for all those libertarians who hate the IRS, so that they can go get rich without being ripped off.
Editor's Note: If you would like to receive a daily email with links to tax posts on TaxProf Blog, email me here.
