CLEVELAND — In the first successful prosecution in an expanding investigation of the U.S. Navy Veterans Association, a Tampa woman pleaded guilty Wednesday to a series of charges linking her to a multistate scam that fleeced millions from donors who thought they were contributing to veteran causes.
Clad in handcuffs and the blue prison garb she has worn since October, an emotional Blanca Contreras appeared in an Ohio courtroom to plead guilty to engaging in a pattern of corrupt activity, complicity in aggravated theft of more than $500,000, money laundering and tampering with records. She will be sentenced Aug. 3 and faces from three to 25 years in prison.
The 39-year-old mother of five fought back tears as Judge Kathleen Ann Sutula explained that her guilty plea meant she could be deported to Mexico. She is here on a work visa.
A series of articles published by the St. Petersburg Times beginning in March 2010 exposed the charity as an elaborate fraud, prompting investigations by attorneys general in nine states, including Ohio. The IRS also began an investigation that led its agents and officials with the U.S. Department of Veterans Affairs and the Florida Department of Agriculture and Consumer Services to seize documents last summer at Contreras' Clair-Mel home.
The nonprofit had reported raising more than $100 million since 2002 and having 66,000 members, a national headquarters and offices in 41 states.
But the Times' investigation found that none of the people listed on the group's website as state officers or members of its board of directors existed. The newspaper found that the charity steered hundreds of thousands of dollars in campaign contributions to conservative politicians across the nation, as well as some prominent elected officials in the Tampa Bay area.
The mastermind behind the operation is still nowhere to be found.
The man known as "Bobby Thompson" has eluded investigators since he vanished more than a year ago. It was Thompson who founded the nonprofit in 2002 from a $600-a-month, roach-infested duplex in Ybor City. His large campaign contributions got him noticed by conservative politicians and entree to a White House photo op with President George W. Bush, U.S. Sen. John McCain and then-House Minority Leader John Boehner in 2008.
Investigators regard Contreras as a key accomplice, said Special Agent Arvin Clar of the Ohio Attorney General's Office, but they're far from satisfied.
"Am I high-fiving people right now? No," Clar said after Contreras pleaded guilty. "I want to find Bobby Thompson."
The public defender representing Conteras, Bill Thompson, said he won't comment until after the sentencing. Her son, Arturo, who is a soldier with the U.S. Army, attended the hearing dressed in fatigues. But he didn't comment, either.
Between now and her August sentencing, Contreras will cooperate with prosecutors, telling them about her dealings with Thompson. She has been promised that her two grown daughters, Nancy and Stacie, would not be prosecuted. While the daughters helped Contreras in her role as a volunteer with the nonprofit, forensic auditors haven't been able to link them to any of the nonprofit's finances, said Brad Tammaro, a special prosecutor in the Ohio Attorney General's Office.
Contreras moved two doors down from Thompson's Ybor City duplex in August 2006, Tammaro said. She cashed her first check from the Navy Veterans Association on Oct. 17, 2007. From then until July 28, 2010, when regulators had begun their investigations, Contreras cashed checks at Tampa banks totaling $472,373 — strictly from donations from Ohio residents to the Navy Veterans Association.
"It disappears once it goes through her fingertips," Tammaro said. "We'd like to ask her where that money went."
Thompson cashed a total of $900,000 from the same source during the same period, Tammaro said. And a third unnamed person cashed $201,000 during that span. This person may be indicted soon, Tammaro said.
Photos of Contreras, and her daughter Nancy were displayed on the association's website. They weren't named, only identified as volunteers. They started signing as officers of the nonprofit shortly after Thompson abandoned his Ybor City duplex in 2009 without leaving a forwarding address.
In November 2009, Contreras signed papers registering the Navy group in Washington state, listing herself as acting secretary.
A month later, Contreras signed as acting secretary of a Connecticut chapter. A later motion said that chapter was going out of business, scraping up only $31,000 in revenue and listing its only assets as two laptops and a typewriter. Declining membership was blamed, according to a document Contreras signed in December 2009.
And yet that same chapter boasted revenue of nearly $200,000 in each of the three prior years. In September 2009, the IRS audited the nonprofit's tax return from 2008, but later gave the charity a clean bill of health.
Tammaro said he reviewed the documents the IRS seized from Contreras' home. They included boxes of shredded documents, registration rolls of "members" in other states and books on charitable law. There were no financial records, he said.
"The lack of documentation is proof that this individual participated in theft," Tammaro said. "As a nonprofit, it has to specify how it's spending this money. They didn't come close to doing that."
But investigators aren't any closer to the man who orchestrated the scam.
They lost track of him after June 16, 2010, about 90 days after the Times began publishing stories about him. Clar said that's when he was last seen withdrawing more than $500 from an ATM on 42nd Street in New York City.
A powerful Ohio law firm, Mac Murray, Petersen & Shuster, which had been paid more than $277,000 to represent the nonprofit, dumped Thompson as a client last summer after its attorneys said they couldn't find or contact him after June 20, 2010.
The Ohio Attorney General's Office in August concluded that he had stolen the identity of a Washington state man named Bobby Thompson. Two months later, Ohio investigators discovered another identity, this one belonging to a New Mexico man, that he had stolen as well. After months of looking for him, investigators know only that they don't know the real identify of the man who called himself "Commander Thompson." That honorific is false as well, as the military says it has no record of a Bobby C. Thompson serving in the military at that rank.
Even America's Most Wanted, which aired an episode on Thompson in March, failed to find Thompson despite the show's record of catching 1,146 fugitives after 1,059 episodes.
Clar said he has ties to New York City. But there's a good chance he might be in Latin America.
"He had a huge fondness for tequila, and money goes a long way in a place like Mexico," Clar said. "We know that Contreras and her friends were teaching him Spanish. We were told by a couple of sources that he spoke Spanish like a gringo."
Michael Van Sickler can be reached at firstname.lastname@example.org.