United States Navy Veterans Association
|Founded||2002 (First tax filing)|
|Dissolved||Ceased fundraising in 2010|
|Key people||John Donald Cody, alias "Bobby Thompson"|
|Area served||United States|
|Revenue||$22.4 million (2008)|
|Website||Formerly www.navyvets.org, which linked to http://navyvets.tripod.com/|
The United States Navy Veterans Association (USNVA) was a tax-exempt veterans' organization that claimed to have a national headquarters in Washington, D.C. It claimed that its purpose was to support the U.S. Navy, and to assist veterans and members of the U.S. Armed Forces, and their families.
The Association claimed to be a national organization with 43 U.S. chapters and over 66,000 members.
USNVA was the subject of recent investigative reporting, which resulted in criminal and administrative investigations in several states and the removal of its listing from the U.S. Department of Veterans Affairs website. The organization's national headquarters in Washington DC proved to be a rented post office box, rather than an actual physical office location. USNVA operations have ceased and, after a two-year search, the leader, John Donald Cody, was arrested on April 30, 2012 in Portland, Oregon. Cody had run the organization under the alias "Bobby Thompson", and authorities were at first unable to determine his real name. However, on October 1, 2012, it was announced that Cody's identity had been determined using fingerprint records.
USNVA claimed to be the current form of charitable groups that date back to 1927, although the USNVA itself first filed with the Internal Revenue Service in 2002. The Association claimed 66,000 members.
The Association's stated mission, in summary, was to: Support the U.S. Navy; provide assistance to war veterans, members of the U.S. Armed Forces, and their families; and "the support of legislative action to provide to our service personnel, veterans, and their dependents, widows and orphans, the remuneration and benefits they truly deserve."
According to the Association's website, there were 41 state Chapters, along with Chapters in Washington, D.C. and Puerto Rico and Divisions in Panama and the Philippines. However, the New Mexico Attorney General claims that the addresses given for the New Mexico chapter are for vacant lots.
The USNVA website listed the MacMurray, Petersen & Shuster LLP law firm in New Albany, Ohio as its General Counsel; Legislative Associates, Inc. of Stillwater, Minnesota as its Legislative and Public Policy Counsel, and Rubin & Associates, P.A. of St. Petersburg, Florida as its Special Counsel. It also hired additional lobbyists to gain the right to solicit in Virginia.
- Of the 85 Association officers listed on IRS filings, only one could be located: He identified himself as a Mr. Bobby Thompson, a retired Lieutenant Commander in the U.S. Navy Reserve, although no records could be found to support the claim.
- The Association, in communications through its Ohio-based lawyer, refused to allow the reporters to speak with any other Association officer.
- The Association claimed $22.4 million in revenue in 2008, but refuses to show reporters any detailed information about how the money was spent.
- Even though the Association says its five-member executive board and 12 key officers work out of the national headquarters on M Street in Washington, the Association's headquarters address is a rented mailbox at a UPS shipping store.
- An audit USNVA submitted to the Better Business Bureau was rejected because it did not meet generally accepted accounting principles and had other irregularities. The audit was allegedly signed by a CPA located at the World Trade Center in New Orleans. Neither the building managers, state of Louisiana, or the Society of Louisiana CPAs had any record of the listed accountant.
- The Association used telemarketers as a fundraising tool. Some of the Association's contracts stipulated that for every pledge, the telemarketing company kept 60 percent, well above the preferred norm of 12 to 13 percent.
Times reporters spoke with Mr. Thompson at his residence once. On a later visit in December, 2009, his leased residence was found vacant; according to the landlord, no forwarding address was provided.
In response, the USNVA's attorney denied all of the Times' assertions, calling the investigation "flawed," and saying USNVA officers did not want to speak to the Times reporters because of their "disreputable tactics and stories and biases."
The American Institute of Philanthropy testified before Congress about inefficiency and wrongdoing at veterans charities. AIP features USNVA in a cover article for the December 2010 publication of its Charity Rating Guide & Watchdog Report: Phantom Charity Takes Flight, Leaves Veterans Stranded. According to the article, the misused money was "unlikely be recovered and used to help deserving veterans.”
Virginia contributions and exemption
On 23 February 2009, the Virginia Division of Consumer Protection barred USNVA from soliciting for donations because it had failed to register as a charity and to make the necessary financial disclosures. Samuel F. Wright, a Washington-based lawyer, was retained to get the USNVA the right to solicit in Virginia, and he worked with a man who claimed to be Bobby Thompson, the Chief Financial Officer of USNVA. In March 2010, the St. Petersburg Times published a series indicating that the USNVA was a one-man operation fraudulently soliciting money as a veterans' charity. When asked by the St. Petersburg Times whether Wright had ever spoken with anyone at the USNVA other than Thompson, Wright refused to answer citing attorney-client privilege. In May 2009, Wright met with then-Attorney General Bill Mims to discuss requesting an exemption from the requirement to register, but on 18 August 2009, the USNVA received a letter stating that the Attorney General concurred with not granting the organization an exemption.
Following that letter, Thompson, who was a Florida resident, began to donate to Virginia politicians. In 2009, Mr. Thompson made $78,375 in political contributions. $67,500 was directed to Virginia politicians, with the largest share being $55,500 in contributions to the successful campaign of Virginia Attorney General Ken Cuccinelli (R). Thompson was Cuccinelli's second-largest campaign donor. Out of the $67,500 Virginia contributions, Thompson made only one $1,000 donation to a Democratic candidate.
When questions were initially raised about USNVA, all other Virginia politicians gave the contributions from Thompson to other veterans' organizations, but Cuccinelli initially did not, despite calls from Virginia Democrats. Cuccinelli's spokesman said "if Mr. Thompson was convicted of wrongdoing relative to the misappropriation of funds, and contributions to our campaign came from money that was supposed to go to active duty military or veterans, we would donate those contributions to military support organizations here in Virginia." A month later in June, a Cuccinelli spokesman said $55,500 would be set aside in a restricted account pending the outcome of the investigation into Thompson and USNVA.
Thompson also made an unsolicited $1,000 contribution to Virginia Senator Patsy Ticer (D) in 2009. Wright later contacted Ticer's office, asking for assistance to make it easier for the Association to operate in Virginia. Ticer introduced Virginia Senate Bill 563 that, among other purposes, exempted tax-exempt veterans' organizations such as the USNVA from having to register with Virginia regulators. The bill was unanimously approved by the Virginia House and Senate. After receiving the Thompson contributions, Cuccinelli met with Wright on 15 February 2010 to discuss the legislation which had passed the State Senate. After learning about the March St. Petersburg Times reports, Ticer asked Governor Bob McDonnell (R), who received a $5,000 contribution from Thompson, to veto the bill she sponsored. On 11 April 2010, Wright asked Ticer to withdraw her veto request. However, the Governor signed the bill on 12 April 2010. The new law took effect on 1 July 2010. Both Senator Ticer and Governor McDonnell have given the contributions from Thompson to other veterans groups.
Removal from VA website
U.S. Senator Jim Webb (D-VA) wrote a letter to the U.S. Department of Veterans Affairs asking for the removal of the U.S. Navy Veterans Association's listing from the VA website of veterans organizations, citing recent media reports and official investigations. The VA removed the listing by the next day, noting that listing an organization does not constitute an endorsement.
Investigations and prosecutions
Officials in at least five states – New Mexico, Ohio, Hawaii, Missouri, and Florida – investigated the Association. The USNVA was banned from soliciting in at least the states of New Mexico and Hawaii.
In August 2010, Ohio Attorney General Richard Cordray announced that a nation-wide arrest warrant had been issued for the man known as Bobby Thompson, who had stolen the identity and Social Security Number of a victim who was not connected to the USNVA. Cordray stated, “We know he bilked Ohioans out of at least $1.9 million, and we estimate that nationally he collected at least $20 million.”
In June 2011, Blanca Contreras, 39, of Tampa, Florida, pleaded guilty to engaging in a pattern of corrupt activity, aggravated theft, money laundering, and tampering with records in connection with her four-year involvement with the organization. On 10 August 2011 she was sentenced to five years in prison and faces deportation to her native Mexico upon her release. In exchange for her guilty plea, her daughters, Stacie, 24, and Nancy, 21, who had also been involved with the organization, received immunity.
After a two year search, the man known as "Bobby Thompson" was arrested on April 30, 2012 in Portland, Oregon. He pleaded not guilty in early May to 22 charges related to the alleged scam, signing his name with an "X". On October 1, 2012 authorities announced that they allege Thompson's true identity is of fugitive John Donald Cody, a former Army intelligence officer and 1972 graduate of Harvard Law School who had been eluding investigators since 1984.
On November 14, 2013, after a six week trial in an Ohio state court, Cody was found guilty of 23 charges including theft, money laundering, engaging in a pattern of corrupt activity, tampering with records, and identity fraud. Cody is expected to be sentenced on December 16, 2013. Cody, through his attorney, said that he intends to appeal the conviction.
- http://www.oregonlive.com/portland/index.ssf/2012/10/identity_of_accused_fraudster.html#incart_river_default%7Ctitle= Identity of accused fraudster captured in Portland as 'Bobby Thompson' finally revealed|accessdate= 1 October 2012
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