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WHO IS GOVERNMENT?

A SERIES FROM POST OPINIONS


THE CYBER SLEUTH



Geraldine Brooks on Jarod Koopman of the Internal Revenue Service


Jarod Koopman at Lake Effect Martial Arts gym, in Hamburg, N.Y., where he
teaches jujitsu. (Eric T. Kunsman for The Washington Post)
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By Geraldine Brooks
October 1, 2024 at 8:00 a.m. EDT
30 min
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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.


WHO IS GOVERNMENT?

SEVEN WRITERS GO IN SEARCH OF THE ESSENTIAL PUBLIC SERVANT

The 2024 conversation has been driven by a handful of names. Trump. Harris.
Biden. Vance. Walz. These individuals have put themselves forward to lead our
government. But who really is our government? What is it made of? And what is at
stake when politicians say they want to expand or dismantle it? To find out, we
set seven stellar writers loose on the federal bureaucracy. Their only brief was
to go where they wanted, talk with whomever they wanted, and return with a story
from deep within the vast, complex system Americans pay for, rebel against, rely
upon, dismiss and celebrate. In the coming weeks, we will publish their
discoveries.

The Canary: Michael Lewis on the Department of Labor

The Sentinel: Casey Cep on the Department of Veterans Affairs

The Searchers: Dave Eggers on NASA’s Jet Propulsion Lab

The Number: John Lanchester on the Bureau of Labor Statistics

The Cyber Sleuth: Geraldine Brooks on the Internal Revenue Service

The Equalizer: Sarah Vowell on the National Archives

The Rookie: W. Kamau Bell on the Department of Justice

Show more

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.

When I recently went to meet Koopman at that 1930s classical-revival edifice,
however, the words “Internal Revenue Service” were so discreetly etched — so
low, so small — that my cab drove right past it. It’s as if the building itself
understands its pariah status. Until last year, the staff who work inside had
watched their budget get cut for a decade. Their staffing numbers had reached
lows not seen since the 1970s, even as the U.S. population swelled and the
quantity of tax returns soared. There was no money to update failing technology,
or even the software that ran it. The result was a pileup of paper returns that
colonized corridors and cafeterias, and an American public vexed by poor
service.

That, of course, was the goal: anti-tax activist Grover Norquist’s famous
shrink-it-till-you-can-sink-it strategy. So the civil servants who had been
valiantly struggling to serve more people with fewer resources found themselves
unappreciated — even despised.


ABOUT THE AUTHOR

Geraldine Brooks is a novelist and former foreign correspondent for the Wall
Street Journal. Her books include “March,” which won the 2006 Pulitzer Prize for
fiction, “Horse” and the forthcoming “Memorial Days.”

PreviousNext

And perhaps 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.

Jarod Koopman at work in his home office in Fredonia, N.Y. (Eric T. Kunsman for
The Washington Post)A display case in Koopman’s office marking his career with
the IRS. (Eric T. Kunsman for The Washington Post)
The Ford pickup truck Koopman plans to restore. (Eric T. Kunsman for The
Washington Post)A few of Koopman’s hunting trophies are on display in his
garage. (Eric T. Kunsman for The Washington Post)

He was raised in the state’s Finger Lakes region in a family with a long
tradition in the military and police. In high school, he excelled at two things:
lacrosse and math. He was recruited for lacrosse by Nazareth University, a small
school in Rochester, N.Y., where he became a three-time all-American and majored
in accounting.

“I met him my third day on campus,” recalls his wife, Carly. She was also an
athletic recruit, studying English and special education. The slender blonde
tennis player and the strapping, copper-haired lax bro “just kind of dated and
never broke up.” She now teaches sixth-grade English at the nearby middle
school. I asked her whether she imagined her accounting-major boyfriend as a
scourge of terrorists and child pornographers. “Never in a million years,” she
says. She tilts her head and glances at Jarod — close-cropped hair, piercing
green eyes, swole physique. “But then, I couldn’t really see him as an
accountant, either.”

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We’re sitting at a table on the back porch of the Koopman home, which Jarod
mostly built himself on land long owned by Carly’s parents, who live next door.
It’s on a hill overlooking a pond, amid corn and hayfields, down a rural road
fringed with Queen Anne’s lace and cornflowers. In the garage, next to a gray
Tesla, sits an orange-and-black 1950 Ford F-1 pickup that Jarod is restoring. As
the hot afternoon sun flares on the pond, two well-behaved dogs — Nova Scotia
duck tolling retrievers — pant at our feet. Inside, two equally well-behaved
teenagers, Ella and Ryan, get ready for Ella’s soccer awards night.

Carly offers me a glass of rosé. The couple are wine enthusiasts, currently
completing the second level of their sommelier training. Downstairs, Jarod has
built an elegant tasting room (“my covid project”), a glass-topped table over
tessellated corks, walls lined with selected vintages, the temperature a
wine-friendly chill.

The pond on Jarod Koopman’s 120-acre property in Fredonia. (Eric T. Kunsman for
The Washington Post)
Jarod Koopman’s wine cellar, which he built himself, including the cork table
top and custom ceiling. (Eric T. Kunsman for The Washington Post)

Let me pause here for a moment. 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.

“Well, when you said that you wanted to defend government, I thought, let’s
defend the most unpopular branch.”
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Michael Lewis and Geraldine Brooks in conversation about the IRS

It was sometime in 2012, Koopman recalls, that he started talking with a young
agent he supervised in South Bend, Ind., named Chris Janczewski, about
cryptocurrency.

Janczewski’s two-person office was a sleepy place, and he sometimes filled his
downtime listening to podcasts. “It was Joe Rogan, of all people,” who put
bitcoin on his radar. Rogan was interviewing Andreas Antonopoulos, a Greek
entrepreneur “who was explaining bitcoin to Joe like he was a 5-year-old, and
that made it easy for me to understand it.” When Koopman came to visit, the two
started a series of conversations about the potential and the risks of the new
currency. “We had a similar mindset,” Koopman says, “that this could be the next
challenge, a new potential for fraud, the next thing that’s going to be a
threat.” They bought some bitcoin with their own money, just to see how it
worked. “It was $40 a coin in those days.” It’s now hovering at about $57,000.
Koopman shrugs. “Should’ve kept it.”

Bitcoin then was just three years old. Few people understood what it was or what
it might be good for. A challenge on Twitter, to explain bitcoin in one
sentence, yielded this skeptical description: “Like if idling your car 24/7
occasionally produced solved Sudoku puzzles that you could then exchange for
heroin.” But back in the 12th century, the Mongols had trouble getting people to
accept the innovation of paper money.

Bitcoin’s origins were idealistic: It was designed by a pseudonymous computer
scientist after the 2008 financial crisis revealed the precarity of the existing
financial system. It was a cryptographically created store of value, requiring
immense amounts of computer power to generate, meant to exist outside the
control of governments. It allowed individuals anywhere to transact without the
intervention of third parties, such as the banks that had failed and the stock
exchanges that had plunged.

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In a bitcoin crypto transaction, a string of 64 characters — upper- and
lowercase letters and numbers — is called a hash. The hash labels a block of
data representing a financial transaction. The transaction is acknowledged and
recorded by a random network of computers all over the globe, and once that
happens, the record is immutable. Anyone with good internet and enough disk
space can be part of the network, and anyone can see the transaction. A laborer
from Kerala, India, working in Dubai can send pay home to his family without
paying fees to a bank. A dissident group can get funds without a repressive
government interfering. And drug dealers, money launderers, terrorists,
scammers, tax evaders and pedophiles can hide their transactions in these
decentralized, anonymous strings of winking characters.

Or that’s what everyone thought.

What if you could put a name to a transaction and follow the money? Since not
one transaction can be hidden, revised or deleted, you’d then have a fiesta of
irrefutable evidence you could use against bad actors.

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.”

A memorial honoring members of the Criminal Investigation unit at the IRS
building in the District. (Kent Nishimura for The Washington Post)Jarod Koopman
in his office at the IRS building in Washington. (Kent Nishimura for The
Washington Post)
Jarod Koopman at the IRS building. (Kent Nishimura for The Washington Post)A
clothes tree in Jarod Koopman's IRS office. (Kent Nishimura for The Washington
Post)

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.


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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.

Sometimes, finding that name is as simple as doing a Google search. For two
years, an alphabet soup of federal agencies had been pursuing the mastermind of
Silk Road, one of the earliest drug bazaars on the dark web, home of unwholesome
sites that don’t show up on regular browsers. Its creator was known only as
“Dread Pirate Roberts‚” or “DPR,” an alias he’d plucked from “The Princess
Bride.” While DEA agents communicated with him online, trying to get close by
posing as cartel bosses, and the FBI chased drug buyers all over the country, it
was one of Koopman’s team, Gary Alford, who uncovered DPR’s identity. The Dread
Pirate turned out to be an unsuccessful online bookseller, 29 years old when he
was arrested, who had branched out into selling his homegrown psilocybin
mushrooms, then expanded the business into a billion-dollar criminal enterprise,
hiring hit men to murder dealers he suspected of stealing from him (although the
killings weren’t carried out).

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Koopman encouraged his team to search for digital scars, the tiny mistakes or
just plain carelessness that linger in the forever world of the internet.
Alford’s insight was to look backward, into the months before Dread Pirate
Roberts understood that he was about to become a dangerous drug lord. An
innocent person doesn’t worry too much about leaving digital fingerprints.
Alford searched Google for the very first mentions of Silk Road. He scanned old
chatrooms for gossip about drugs and looked at posts about coding. When he found
a poster called Altoid hyping the virtues of the brand-new Silk Road marketplace
on a drug forum, and a poster with the same alias simultaneously seeking coding
advice of the kind you’d need to run the Silk Road site, it piqued his interest.
On the coding query, Altoid had initially given an email address for replies,
before going back later and deleting it. But Alford discovered that one
responder had copied that address into his reply: rossulbricht@gmail.com.

Ross Ulbricht is now serving two life sentences plus 40 years. Because of the
permanent record of the blockchain, the U.S. Treasury has received a gift that
keeps on giving, as Koopman’s team continues to unearth illicit accounts tied to
Silk Road crimes. Long after Ulbricht’s arrest, another of Koopman’s agents,
Tigran Gambaryan, figured out that the people who had really been stealing from
Silk Road were not the drug dealers Ulbricht had plotted to have killed, but a
DEA agent and a member of the Secret Service supposedly working alongside the
IRS on the case. (As an FBI agent on the case observed in a Wired report, it was
as if “Breaking Bad” had another episode in which you learned that Hank, Walter
White’s DEA nemesis, had been bent all along.) The key piece of evidence nailing
the DEA agent was another digital scar. Ulbricht usually encrypted all his
messages, but in a moment of carelessness he’d failed to run one line of text
through his privacy software. In that line, he mentioned the amount of a payment
to one of the agent’s aliases. Koopman’s team was able to trace that figure
through the blockchain to its destination in the agent’s personal account. The
DEA’s Carl Mark Force IV served more than five years in prison; the Secret
Service’s Shaun Bridges served six.

Supporters of Ross Ulbricht, the creator and operator of the Silk Road
underground market, in front of a Manhattan federal courthouse on the first day
of jury selection for his trial in 2015. (Spencer Platt/Getty Images)

In November 2021, they traced another stash of bitcoin that had been stolen from
Silk Road nine years earlier. The key to the digital wallet was found on a
circuit board in a popcorn tin stored in the bathroom closet of a house in
Gainesville, Ga. Because of the steep rise in the value of bitcoin, that find
delivered $3.36 billion to U.S. taxpayers.

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.

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Another notable case started with an ill-advised tweet. Hamas’s military wing,
the Izzedine al-Qassam Brigades, had gone on Twitter, shaking a tin cup to
elicit funds for its operations. “Donate to the Palestinian Resistance via
Bitcoin[,]” tweeted @pal_resi, giving the hash for its bitcoin wallet. Using
their tracing techniques and the powers of the know-your-customer banking
regulations, Koopman’s team was able to secretly take over al-Qassam’s websites
and its donation button and, later, do the same for sites funding ISIS and
al-Qaeda. For about a month, while the Justice Department worked up indictments,
all the funds going into the sites to support terrorism were instead flowing
right to Uncle Sam, to the Victims of State Sponsored Terrorism Fund. Janczewski
says he couldn’t resist “enjoying the job a little.” Any visitor who clicked on
the Hamas logo was “rickrolled” — diverted to a kitschy 1980s video of Rick
Astley singing “Never Gonna Give You Up.”

Let’s pause again. The IRS scored a huge win in the war on terrorism. It took
money that would have bought guns to kill Americans such as Hersh
Goldberg-Polin, who was abducted in Israel by Hamas on Oct. 7 and later killed,
and instead gave it to American victims of such hideous crimes.

Did you know?

The next time a politician or a pundit traduces the IRS, or JD Vance suggests
firing half the civil service and putting in “our people,” consider whether a
system that filled out its ranks with a new batch of political loyalists every
four years would have the expertise of these dedicated, lifelong civil servants.

For obvious reasons, Koopman is vague about the tracing techniques his agents
use to follow money on the blockchain. And even if he weren’t, you’d need to
speak fluent Geek to understand it. The methods change constantly, helped along
by specialist blockchain analytics firms and academic researchers, always
adapting to keep up with criminals who try new ways of mixing and tumbling
transactions to evade pursuit. The new frontier for criminals is the gaming
world of the metaverse, which combines anonymity with digital currency. There
are also challenges posed by new coins, such as monero, that are designed to be
untraceable. About monero, Koopman will say only: “We have some capabilities.”

Jarod Koopman poses for a portrait in his office at the IRS building in D.C. on
Sept. 11. (Kent Nishimura for The Washington Post)
A challenge coin in a conference room used by the criminal investigation unit.
(Kent Nishimura for The Washington Post)

Their capabilities were tested in the investigation of Binance. If bitcoin’s
creator is still alive, she or he is probably horrified by the way a beautifully
decentralized structure has morphed into something that looks much like the
financial system it was meant to replace, only worse.

It turned out that most crypto users can’t cope with unhosted wallets and
do-it-yourself peer-to-peer transactions. They didn’t want to risk the thumb
drive with their $300 million winding up in the pocket of a torn pair of jeans
that the housekeeper threw out (the plot of an episode of “Silicon Valley”).
They wanted something that looked like a brokerage through which to buy, sell
and store their crypto. Exchanges such as FTX and Binance spun up, often
overseas, looking sort of like regular financial institutions, but coloring way
outside regulatory lines drawn to protect investors and the stability of the
financial system.

In 2018, Koopman had leads revealing that Binance, with 20 to 30 percent of the
U.S. market and $65 billion in U.S. transactions a day, was failing to comply
with the rules that govern any financial services business that has U.S.
customers. It was hard to know where to start the investigation. Even Binance’s
location was unclear. It was initially in China, then Hong Kong, then Japan,
then Malta. Changpeng Zhao, the Canadian co-founder and CEO, lived in Dubai.

“They existed everywhere but nowhere,” Koopman says. “We had to come up with new
methods.” The lead agent on the case, Adam Rutkowski, had a computer science
background that made him well suited to a pursuit that would involve no physical
surveillance, no interviews with company principals. “He worked his butt off,
gave five and a half years of his life to it and delayed retiring so he could
finish this case,” Koopman says.

The team had already seen that the Binance platform was used in the Welcome to
Video case and in another big case in which hackers with North Korea’s Lazarus
Group had stolen crypto to fund the state’s nuclear program. There was also
evidence that ransomware attackers were laundering their take through the
platform. By law, Binance should have flagged these suspicious activities and
notified U.S. authorities. It hadn’t. Nor did it follow know-your-customer rules
that require clients to provide identity documents before opening an account.
All Binance required was an email address.

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Koopman’s team started to collect data, filing the financial equivalents of
search warrants on Google and Amazon Web Services for all records dealing with
Binance transactions. Rutkowski came up with the idea of searching calls to the
AWS help desk, since anyone calling had to give a name and location.

“We weren’t ready for the magnitude of data that came in,” Koopman says. They
looked for user IDs from Iran, IP addresses from regions under U.S. sanctions
such as Syria and Crimea. They learned that Binance staff had called U.S.
customers they’d flagged as VIPs and offered to set up accounts for them that
would make it look as though they weren’t in the United States — subject to its
strict regulations and to owing U.S. taxes. Internal company chats revealed that
high-level employees knew exactly what they were doing. “We need a banner,” one
compliance executive wrote. “Is washing drug money too hard these days — come to
Binance we got cake for you.” Zhao knew all this. He told his executives that it
was “better to ask for forgiveness than permission” and that they should put
growth and profits over obeying laws that would drive criminal customers and
their illicit cash away.

As the Justice Department prepared charges, Koopman’s agent in Dubai kept a
close watch on Zhao’s movements. The United Arab Emirates doesn’t have a formal
extradition treaty with the United States but sometimes will turn over suspects
anyway. It didn’t come to that. “The choice is to be on the run for the rest of
your life, afraid to leave Dubai, or to turn yourself in,” Koopman says. Zhao
chose to plead guilty to a single count of failing to maintain an anti-money
laundering program and got four months, which he is serving in a federal prison
near Santa Barbara, Calif. He paid a $50 million fine and stepped down from his
company. Binance turned over records that will yield hundreds more prosecutions
and paid $4.3 billion, one of the biggest criminal settlements in history.

Zhao Changpeng, chief executive officer of Binance, poses for a photograph
following a Bloomberg Television interview in Tokyo in 2018. (Akio Kon/Bloomberg
News/Getty Images)

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.

Example: When Janczewski was trying to get home after an exhausting case in
Thailand, his flight was delayed for hours and he asked for permission to buy a
day pass for one of the airline lounges. It was denied. Janczewski now works for
TRM Labs, doing blockchain analysis for the likes of Goldman Sachs and Shopify,
although he and his firm also sometimes work as contractors on Koopman’s cases.
(Gambaryan left to straighten out Binance’s shoddy compliance and is, alas, in
the slammer in Nigeria, where the government appears to be using him as a
hostage to shake down Binance for the kind of settlement the U.S. government
extracted.) But Koopman is getting new premises, moving his team out of their
claustrophobic beige metal cubicles to a bright, glassy new center in Court
House, Va., that will look more like a tech start-up. “I have agents who would
be gone if this change wasn’t happening,” he says. “You don’t want that talent
to walk out the door.” Koopman himself has never considered leaving public
service, even though he knows he could be making magnitudes more money. “It’s
not about that. It’s about the mission,” he says. In the private sector, skills
like his could protect an individual business, but at the IRS, he protects
everyone.

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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.

A portrait of IRS Commissioner Danny Werfel hangs on the wall of his office
suite in the IRS building in D.C. (Kent Nishimura for The Washington Post)

Werfel still works in the gray 1930s edifice near the National Mall, and though
it’s 100 degrees outside, the HVAC is so glitchy that he wears a sleeveless gray
fleece over his white shirt and tie. Almost a year and a half into his
appointment as IRS commissioner, his photograph still hasn’t made it onto the
wall that features President Joe Biden, Vice President Kamala Harris and
Werfel’s boss, Treasury Secretary Janet L. Yellen. The empty picture hook
implies a guy more about substance than ego. At Werfel’s confirmation hearing,
one senator thanked him for taking the job, noting that “there are easier ways
to make a living.” But he believes the words of Supreme Court Justice Oliver
Wendell Holmes Jr., which are etched into stone just below the IRS building’s
pediment: “Taxes are what we pay for a civilized society.”




I have always believed that, too. Growing up in Australia, I don’t remember
people complaining much about their taxes. We felt we got what we paid for in
decent education, magnificent national parks and universal health care. In
school, studying the American Revolution, I never quite understood why
Bostonians threw all that tea in the harbor, since the British had just spent a
motza defending them from the French. But I’ve stayed in the United States and
raised American kids, who were both absolutely affronted the first time they got
a paycheck with a tax bite taken out of it.

A week before I met up with Werfel, he had been in Chicago visiting IRS
employees and talking to local media about the proliferation of scams and how to
avoid them. Since some of his relatives were vacationing nearby in Michigan, he
decided to drive up for a reunion. “And I’m thinking, ‘All these roads are in
great condition!’ The quality of life we have, it’s all government. Government
touches you a hundred times before breakfast, and you don’t even know it.”
Ninety-six percent of federal revenue is raised by the IRS, to be used on
everything from a veteran’s prosthetic to the rocket that recently changed the
trajectory of an asteroid and might one day save the planet.


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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.

Amid the drumbeat of negative stereotypes, getting that word out can be a heavy
lift. Even after a decade of spectacular successes, Koopman’s work remains
unsung. In July, D.C.’s cybersecurity experts gathered for a conference at the
Tysons Ritz-Carlton, their company tables offering free merch such as stuffed
toy donkeys — “We protect your assets.”

Jarod Koopman in his office. (Kent Nishimura for The Washington Post)

When introducing the keynote speaker, Bradford Rand, the conference organizer,
asked for a show of hands: “Who here knows that the IRS is involved in
cybercrime?” Only about 10 in the crowd of 500 raised their hands. “Well, it’ll
blow your mind what they do. And here to tell you about it is Jarod Koopman,
executive director of Cyber and Forensics for IRS Criminal Investigation — and
I’ve pleaded with him not to audit me.” Koopman grinned gamely, as if it weren’t
the 10 millionth time he’d heard that line.

Later, I asked him whether it bothered him that even a roomful of experts seemed
ignorant of his work.

“Yes and no,” he said. “They should know that we’re the best at it, that our
team is incredible. But sometimes, it’s beneficial to fly under the radar.” That
way, the criminals don’t see him coming. He can continue to do jujitsu: to be
the little guy reducing the much bigger guy to helplessness on the mat.

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