** Update October 1, 2012
In April 2012, a fugitive using the
alias "Bobby Thompson" was arrested in Oregon and is now jailed
in Ohio facing charges of corruption, theft, and money laundering
related to a sham charity he set upthe US Navy Veterans
Associationto steal millions of dollars in donations
intended to help veterans. Today the US Marshalls Office revealed
the true identity of "Bobby Thompson" to be John Donald Cody.
Cody is a former military intelligence officer who has been on
the FBI's wanted list since 1987 on charges of fraud and espionage.
Read CharityWatch's article about his phony charity, below.
From the December 2010 Watchdog
Charity Takes Flight
Leaves Veterans Stranded
The United States Navy Veterans Association
(USNVA) certainly looked like a legitimate organization on the surface.
This multi-million dollar charity, operating since 1927, was registered
with the IRS, run by ex-military men, and had dozens of chapters
and 66,000 members nationwide. Legitimate, that is, until media
investigations revealed that the charity was not in operation until
2002, had only one member or charity official that could be located,
was run out of an individual's duplex in Florida, and appears to
have consisted of one man using a fake name for whom no record of
U.S. military service could be found.
A man we will refer to as "John Doe"
stole the name, social security number, and birth date of another
man, Bobby Thompson, according
to an August 2010 article in the Roanoke Times. He then used
this fake identity to set up a sham charity and bilk donors out
of nearly $100 million over a seven year period. Authorities have
since charged him with identity fraud and issued a nationwide warrant
for his arrest. "The real Bobby Thompson, whose identity was stolen…has
absolutely no connection to the U.S. Navy Veterans Association,"
according to a news release on Ohio Attorney General Richard Cordray's
website. While John Doe abandoned his former residence and has yet
to be located by authorities, he will not soon be forgotten by the
donors, government lobbyists, politicians, and fundraisers he had
dealings with, or by his former lawyers and cohorts he left behind.
Trouble started for John Doe when the
St. Petersburg Times (SP Times) began a six-month investigation
into USNVA in late 2009. When attempting to locate the charity's
national headquarters using the same address the group filed on
its tax form and listed on its web site, only a "rented mailbox
a UPS shipping store" was found, according to the paper. The
SP Times had no better luck when trying to locate many of
the charity's chapters throughout the country, or any of the officers
and directors reported on the charity's tax return and state registration
documents. It found that "most state chapter addresses
are rented mailboxes," and that "none of the three officers
listed in Florida registration papers could be found." One
officer's address was non-existent, one was the address for the
Hilton hotel in Miami, and the last was the address of a condo owned
by someone with a different name. Among other searches, the paper
looked for the physical address of the commander of the New Mexico
chapter, Howard Bonifacio, but found the address did not exist.
If it did, it "would sit on a parking lot adjacent to a car
dealership," reported the SP Times. For six months the
paper conducted "hundreds of searches of directories, online
public records databases and newspaper and broadcast stories going
back more than 25 years" and reported it was unable to locate
84 of the 85 officers or directors named in the charity's IRS filings.
The only charity representative the
paper could locate was John Doe, who apparently ran the charity's
operations out of his Florida duplex, but he was not a big fan of
transparency. "We are a great charity," he told the SP
Times, citing the paper's "character assassination"
and "McCarthy-like witch hunts" as an explanation for
why the USNVA's state officers and executive board did not want
to disclose their whereabouts or respond to the reporter's inquiries.
Searches for the charity's internal auditor, Deborah Johns, were
also unfruitful. The paper reported in its March 20th, 2010, article
that when it asked USNVA for Johns' contact information, John Doe
said the charity would release a copy of her audit when "pigs
USNVA was registered with the IRS under
a special section of the tax code that exempted it from some of
the public disclosure requirements most public charities must follow.
For example, USNVA had to report its total expenses each year but
did not have to publicly disclose how much it was spending on its
programs vs. fundraising and other overhead. For John Doe, however,
even this level of transparency was too much for his taste. When
asked by the SP Times to supply copies of USNVA's tax returns
and IRS exempt status application, which it is required to do within
30 days under IRS rules, John Doe falsely claimed that his charity
was exempt from this rule.
If you do not like the rules, change
them. This seemed to be John Doe's attitude when he hired attorney
Samuel F. Wright to lobby Senator Patsy Ticer of Virginia. The state
of Virginia has a large military presence, making it a key fundraising
area for veterans and military charities. The vast majority of U.S.
states, including Virginia, require charities to register financial
and other information with oversight agencies as a condition of
being allowed to solicit contributions from residents in their state.
Ticer reported to the SP Times that Wright showed up at her
office with another Northern Virginia lobbyist whom she knew and
that Wright asked her to sponsor legislation that would exempt certain
veterans groups like USNVA from registration. She agreed to sponsor
the bill, and it passed the state Senate and House unanimously in
February and March 2010, respectively. By the time Ticer became
aware of the serious problems at USNVA and wanted to squash her
bill, it was too late to prevent Governor Robert McDonnell from
USNVA "has never made a contribution
to any candidate for office, ever," John Doe told the SP
Times, according to the paper's March 20th, 2010, article. Contributions
were definitely made by John Doe to various politicians and officeholders
in Virginia, but with so little accountability over the charity's
finances, it is difficult to confirm whether he used the charity's
funds or his own. Among campaign donations to politicians in that
state, $1,000 went to Senator Ticer; $5,000 went to Governor McDonell;
$2,000 went to House Speaker Bill Howell, and the largest donation,
$55,500, went to Attorney General Ken Cuccinelli. Once major issues
at USNVA were brought to light, most quickly agreed to donate the
contributions they received to other veterans charities, except
for Cuccinelli, who held out for about two months before publicly
stating he would do the same.
The information on USNVA's web site,
navyvets.org, made the group seem impressive, even if its low quality
design could have clued donors in that something was amiss. In addition
to boasting of its 66,000 members and dozens of state chapters throughout
the U.S., it also cited substantial contributions from several foundations,
and claimed to have received an award for international news reporting.
According to the SP Times, USNVA "refused to provide
addresses or phone numbers for the foundations." The paper
could not locate any "tax records, web sites, or news stories"
about the Irene T. Boyar Foundation, the John F. Kearney Foundation,
or the Deborah & Charles Pissot Foundation, nor could it find
them listed "in major reference directories of U.S. foundations."
As for the Jill Dando Award the charity claimed to have received
in 2003, an official from this institution told the SP Times it
had "no record of giving any award to the U.S. Navy Veterans
Perhaps most disturbing are the countless
thank-you notes and other praise the charity posted on its web site
from soldiers who had supposedly received care packages from the
group. Disturbing because the SP Times confirmed that many
of the notes of praise were substantively copied without permission
from the web site of anysoldier.com, an organization that helps
Americans connect with active duty soldiers and send them care packages.
"Everyone in the unit who received a package from you wants
to thank you so much. And for your [web] site," reads a thank
you letter on USNVA's web site from Gina Pronzati, U.S. Navy, Afghanistan.
The paper reported finding seven thank-you letters on USNVA's web
site that "were near duplicates of messages written to anysoldier.com
or anysailor.com." According to a June 2010 article in the
SP Times, Pronzati told the paper that she never received
a package from USNVA, and never wrote the group a thank-you. "I
knew immediately it was some sort of scam, because it was exactly
what I posted on anysailor.com. It's a pretty horrible thing for
someone to do," said Pronzati.
Throughout the SP Times' investigation,
USNVA communicated with the paper primarily through its attorney,
Helen MacMurray, who also happens to be former Chief of the Consumer
Protection Section of the Ohio Attorney General's Office, the department
that oversees charity regulation in that state. In response to the
paper's allegations that USNVA lifted soldiers' thank-you notes
from other web sites, the charity responded through MacMurray that
"sometimes out of haste, negligence or simply a belief that
charity is its own reward," they did not always include something
in the care packages that would identify them as coming from USNVA.
For this reason, the group claims that when it saw a thank-you note
posted on anysoldier.com from care package recipients, it "felt
justified in changing some language and advertising that thank-you
message as its own," reported the SP Times.
USNVA made efforts to legitimize the
organization in the eyes of donors by associating itself with all
things veterans and military related. For example, until recent
events compelled the Department of Veterans Affairs to remove the
charity from its list, USNVA was listed on the Department's web
site as a resource for veterans. John Doe referred to himself as
"Commander Bobby Thompson" on the charity's web site and
told the SP Times he was a lieutenant commander in the Navy
Reserves. Assisted by the nonprofit veterans rights group, the POW
Network, the paper searched for Bobby Thompson's military service
records but could find none. The charity's tax records listed "Jack
Nimitz" as the group's "Director & CEO," who
shares a familiar last name with Chester William Nimitz, a well-known
five-star admiral in the U.S. Navy during World War II for whom
the famous USS Nimitz ship was named. According to the SP Times,
the charity "would not say" if Jack Nimitz was related
to Admiral Nimitz, and "provided no help locating him
when the paper requested to speak with him directly.
As bad press drew more and more negative
attention to the group, pressure mounted and USNVA scrambled to
show that it was doing something charitable. It recruited several
acquaintances to pose for photos to be posted on the charity's web
site to show that real people were involved with the organization,
and rushed out a handful of grants to various charities. While these
grants were likely appreciated by the charities that received them,
they are surely of little comfort to the donors who contributed
millions to the group and for whom little evidence exists that much
of what they gave was ever used for the charitable purposes they
intended. The charity reports in its 2008 tax return that its national
office spent over $2.6 million of its $4.2 million budget on "grants
and other assistance to individuals in the U.S." When the SP
Times could find no evidence that such assistance was actually
provided, it asked the charity for backup. USNVA responded that
it can account for the funds, but was not willing to share any of
the documentation with the SP Times.
USNVA's last-ditch efforts to provide
charity were too late for some state regulators, who by that time
had launched their own investigations into the charity or had barred
it from soliciting in their respective states. Florida ordered USNVA
to cease operations in its state, and launched an investigation
into its "potentially unfair and deceptive trade practices."
Hawaii began an investigation to find out whether the association
fabricated its chapter officials and deceived the public. New Mexico
ordered the charity to cease and desist operations in its state
after finding that the addresses the association provided in its
registration documents are fictional. In May 2010 Senator Jim Webb
of Virginia made a request to the IRS that it launch a federal level
investigation which would look into USNVA's activities nationwide.
Things began to unravel quickly from
here. USNVA's attorneys, MacMurray, Petersen & Shuster LLP, told
the SP Times that John Doe "disappeared" around June 20th,
2010, and shortly thereafter the law firm broke ties with the group.
The charity's professional fundraisers soon followed suit. On July
30th, 2010, federal and state agents seized documents and computer
records from a Florida mother and daughter who were associates of
John Doe, according to a SP Times article of the same date.
Nancy Contreras and her mother, Blanca Contreras, a former citrus
processing plant employee, had signed registration papers in several
states claiming to hold official positions at USNVA ranging from
acting vice president, to chief financial officer, to acting secretary,
according to the SP Times. They had also been described as
association members and were featured in photographs on the charity's
web site. Months earlier the SP Times had attempted to contact
one of the associates, Nancy Contreras, 20, and was warned by USNVA's
then attorney, Helen MacMurray, that any future attempt on the paper's
part to contact her might "constitute criminal 'stalking'," according
to the paper.
Of the nine states currently investigating
USNVA, Ohio has arguably been the most aggressive, freezing the
charity's bank accounts and shutting down its fundraising in the
state. Its investigation into the charity uncovered that John Doe,
in addition to stealing the identity of "Bobby Thompson,"
also stole the identity of a leader of another veterans charity
in New Mexico. On October 15th, 2010, an Ohio grand jury indicted
both John Doe and Blanca Contreras on corruption, theft, and money
laundering charges, according to a SP Times article of the
same date. Contreras was arrested in a Charlotte, North Carolina
airport, according to the paper, and booked into jail there on an
Ohio warrant. John Doe has yet to be located by authorities as of
the date this article was published.
The story of John Doe and the U.S. Navy
Veterans Association is an unfortunate example of how easily the
public can be duped out of millions of charitable dollars by failing
to properly research a charity before deciding to give. Many donors
automatically assume that a charity is "legitimate" if
it is registered with the IRS and are too often impressed by the
claims made by a charity in its solicitations, on its web site,
or in self-reported tax filings. It is tragic that a large portion
of the donations USNVA collected over the years will unlikely be
recovered and used to help deserving veterans.