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Navy Veterans former lawyer: 'I was duped'

Until now, retired Capt. Samuel F. Wright, legal counsel and political lobbyist for the U.S. Navy Veterans Association, has declined to speak publicly about the nonprofit charity that has been revealed to be a spectacular scam.

"I feel terrible about the whole thing,'' Wright said in breaking his silence in a 90-minute interview last week. "I feel embarrassed. I guess we live and learn."

Wright said he blamed himself for accepting Bobby Thompson's "cockamamy'' explanations. He believed the Navy Veterans was a genuine nonprofit, he said, and its pony-tailed founder a wealthy if eccentric retired intelligence officer who poured his own cash into right-wing causes.

Instead, the Navy Veterans network of national offices and roster of tens of thousands of members were an elaborate invention, as was Thompson himself. He had stolen his identity, adopted the guise of a Navy lieutenant commander and operated his bogus charity from a roach-infested duplex in one of Tampa's tougher neighborhoods.

Wright said he questioned some of Thompson's stories — including one about why expense receipts from the Connecticut state chapter were for Natural Ice beer purchased in Tampa — but in the end, Wright said, he always deferred to his client.

"I was being paid to represent him. I didn't see it as my role to cross-examine him."

• • •

Wright is being cross-examined himself now. He said he gave about 16 hours of deposition testimony to investigators from the Ohio Attorney General's Office, which obtained indictments of Thompson in absentia on charges of racketeering, theft and money laundering. Authorities still don't know the name or whereabouts of the man who took the identity, "Commander Bobby Thompson."

Wright said the IRS interviewed him, as well. In September, he came home from choir practice at his Baptist church in Alexandria, Va., to two waiting agents he said interviewed him for three hours.

"I told the IRS I didn't have anything to hide. They kept re­assuring me that I wasn't the target, that this was about Bobby Thompson and the Navy Veterans Association."

Said Wright: "I wish I'd never met Bobby Thompson.''

They began to work together while Wright was associated with Tully Rinckey, a Washington, D.C., and New York law firm founded by two service-disabled veterans. Thompson responded to a mailing the firm sent out to attract new clients.

Thompson ended up hiring Wright as his group's general counsel. The Navy Veterans paid Tully Rinckey $75,700 and Wright $29,323, according to records from Ohio investigators. Wright said the money paid for "legitimate work'' for veterans, such as helping obtain benefits or service ribbons.

Wright said he only met Thompson a handful of times, perhaps four or five. Thompson told him he was a Navy intelligence officer in the late 1960s and a lieutenant commander in the Navy Reserve. Wright said Thompson sounded like a Navy man, talking of naval vessels, ports of call and DD 214s, the forms used for separation from the military.

In Tampa, Thompson lived in a $600-a-month duplex across the street from the fenced parking lot of Ybor City's Cuesta-Rey cigar factory.

Wright saw a different Thompson.

"He stayed in nice hotels,'' Wright said. "I thought he had made a lot of money or inherited money and then had gotten into the Navy Veterans thing.''

Thompson said a family trust fund and investments provided him the income to make hundreds of thousands of dollars of reported contributions to the conservative politicians he favored. He gave $55,500 to the campaign of Virginia Attorney General Ken Cuccinelli in 2009, during a period in which Wright was earning $7,410 from the Navy Veterans to lobby for a Virginia law that waived registration requirements for nonprofit veterans groups.

Wright said Karmika Rubin, a St. Petersburg lawyer Thompson hired as special counsel, picked Wright up in a rental car for Cuccinelli's inauguration party last January at the attorney general-elect's alma mater, George Mason University. Thompson did not attend, Wright said, but wanted the Navy Veterans represented.

Wright said Thompson struck him as "sort of an amateur lawyer" who would cite NAACP vs. Alabama, a 1950s U.S. Supreme Court free-speech case that said the state's attempt to obtain the civil rights group's membership rosters was unconstitutional.

Wright said he spoke up when Thompson invoked the case to justify keeping secret the identities of the 66,000 Navy Veterans members he said he had.

"I said, 'Bobby, nobody's going to get lynched here.' "

Wright said he never met the top officers shown on the Navy Veterans website, CEO Jack Nimitz and Secretary Brian Reagan. Now he says, "I guess they didn't exist."

The website, a platform for thousands of pages of made-up lore about the Navy Veterans, went dark late last month.

• • •

Wright said he made his own examination of the Navy Veterans money-making operation.

The nonprofit used two national telemarketers, Associated Community Services, in Southfield, Mich., and Community Support Inc. in Milwaukee.

They cold-called residents across the country and solicited donations to a nonprofit that said it was dedicated to assisting U.S. veterans and troops fighting overseas. Countless Americans opened their checkbooks.

Wright said most pledges were for $15 or $20, but hundreds of checks flowed in every few days, with perhaps "$70,000 collected in a week.''

The checks were sent to a mail drop in Delaware, Wright said. A contractor periodically emptied the mailboxes and shipped bundles of checks to another company that tallied and deposited them.

Wright said he visited the telemarketing offices in Southfield, an impressive operation involving hundreds of cold-callers. But Wright said he came to believe professional fundraising was bad for the nonprofit's image. It was expensive and inefficient.

The Southfield telemarketer took 60 cents of every dollar donated, Wright said, and the company making the deposits got 25 cents, leaving 15 cents of every dollar donated for the Navy Veterans. The Milwaukee telemarketer took 90 cents of every dollar.

Wright said he thought the telemarketing operations might tarnish the Navy Veterans' image, and besides, they weren't really needed. Wright said Thompson told him membership dues produced much more cash than did the telemarketers. With 66,000 members, and annual dues up to $250, member revenue could top $16 million.

Wright said he told Thompson they should dump the telemarketers, but the commander wouldn't hear of it. Thompson liked to remind others that telemarketing was protected by the First Amendment; the U.S. Supreme Court had said so.

"It might be legal," Wright said he told Thompson. "But it looks bad, so let's get rid of the professional fundraisers."

Now Wright thinks he knows why Thompson wouldn't budge: His hundreds of pages of membership rosters were phony: there was no dues revenue. The only real money was what the telemarketers brought in — at 10 to 15 cents on the dollar.

"I think the amount of money reported to the IRS is way too high," Wright said. "All that other (dues) money was fictional, it now appears.''

Wright said it now seems certain the Navy Veterans' tax returns, which show total tax-exempt income since 2003 in excess of $100 million, were falsified — to exaggerate the importance of Thompson's charity and, by extension, the importance of Thompson himself.

The commander used that cachet to get himself photographed with President George W. Bush, strategist Karl Rove and other politicos.

What happened to the millions of dollars the telemarketers sent the Navy Veterans? Wright said he doubts much of it was spent on the veterans and the fighting troops the American public intended it for.

His conclusion: "It was for Thompson's expenses, I guess.''

• • •

Last year, the IRS notified the Navy Veterans that it would be auditing the charity's Connecticut chapter. Wright said he flew to Ohio to help his successor as Navy Veterans general counsel, Helen Mac Murray, prepare for it.

Thompson and Wright arrived separately and stayed in a pricey hotel in Columbus. Mac Murray sent a sedan to bring them to her law office in suburban New Albany.

Thompson and Wright huddled with Mac Murray and her law firm associate, Betty Montgomery, a former Ohio attorney general. Mac Murray served as chief of consumer protection under Montgomery.

Wright said the records Thompson brought were in disarray. His explanation: All Connecticut chapter records were in the car of a member who encountered high water. The documents "were lost in a flood and all destroyed," Wright said he was told. "This was why we were going to have to reconstruct all the records."

None of the Connecticut chapter's members would participate in the audit, Thompson said, because they were "nervous'' about government scrutiny. Thompson said he would stand in for them.

Then there were the receipts. Wright said some looked altered. Most were not from Connecticut but from the Tampa Bay area, where Thompson lived. Many were for Natural Ice beer.

"The receipts didn't make any sense," Wright said. "They didn't have any dates. There was one postal receipt that Montgomery pointed to that had been Xeroxed, and it appeared someone had deliberately torn off the date."

Why weren't the receipts from Connecticut? Thompson explained that under a reciprocal arrangement, the Navy Veterans national chapter, based in Tampa, used Connecticut's revenue to make purchases in Florida.

And the Natural Ice? Thompson said those purchases were for the beer that went into "care packages" he said the Navy Veterans shipped to U.S. troops in Iraq and Afghanistan.

Wright said he protested. Under a general order, American troops in the predominantly Islamic Mideast theater are banned from drinking or possessing alcoholic beverages. Violators can be court-martialed.

Wright said Thompson was "incensed'' at his attorney's objection. "Thompson said the order is improper: We're going to send them beer.''

Mac Murray said the receipts Thompson provided would not be used at the IRS audit, Wright said, and developed "an alternative plan."

He said he didn't know details of this other plan because he didn't attend the audit three weeks later.

Mac Murray, whose firm was paid $277,102 by the Navy Veterans, declined to discuss her role in the audit. Instead, she released this statement:

"While legal and ethical requirements do not allow us to discuss the details of the legal services we provided to this organization, I can say that — in all our work — our attorneys scrutinize documents produced by clients and only provide to authorities those that are, in our opinion, authentic and accurate."

Early in September 2009, Thompson, Mac Murray and Darryll Jones, a law professor and tax expert, met with two IRS agents in a rented Washington, D.C., office suite.

Wright said Thompson asked him to attend as well, but Wright declined.

"As much as I would like the $150 an hour for the day, I didn't go,'' Wright said. "I told Bobby, 'This is excessive; you don't need another lawyer.' "

After Thompson and his two attorneys answered questions, Wright said he was told the Navy Veterans had received the IRS's blessing. "The IRS said, 'Well, you have to do a better job of keeping receipts and records. But you passed the audit.' "

The IRS might have discovered the Navy Veterans was a fraud at that audit 15 months ago, had the lawyers followed their own suspicions. Said Wright: ''It was not my role to speak out."

Early this summer, he said, he resigned as Navy Veterans special counsel "over ethical concerns."

He said he turned over all his client records to the Ohio investigators after being told attorney-client privilege did not apply because the USNVA was a "sham organization."

"I do feel badly that I was duped along with a lot of other people," Wright said. "But I don't see I've committed any crime."

Jeff Testerman can be reached at testerman@sptimes.com or (813) 226-3422. John Martin can be reached at jmartin@sptimes.com or (813) 226-3372.

Breaking his silence

Samuel F. Wright, top, longtime lawyer for the U.S. Navy Veterans Association, went public about working with Bobby Thompson.

On the Navy Veterans founder, who told Wright he was a retired naval intelligence officer but was using a stolen identity and is now a fugitive: "I wish I'd never met Bobby Thompson.''

On the huge income figures reported on Navy Veterans' tax returns: "I think the amount of money reported to the IRS is way too high." The numbers are "fictional."

On the IRS audit: Thompson had "cockamamy'' explanations for missing records, and "the receipts didn't make any sense.'' Yet his group passed.

Retired Capt. Samuel F. Wright

Age: 59

Law degrees: University of Houston, Georgetown University

Now: Director of the Service Members Law Center at the Reserve Officers Association

Previous: General counsel, special counsel and lobbyist for U.S. Navy Veterans Association; private attorney, Tully Rinckey; U.S. Department of Labor lawyer, specializing in veterans re-employment rights; judge advocate, U.S. Navy Reserve; lawyer with U.S. Navy Judge Advocate General's Corps.

On the Web

To read "Under the Radar,'' the Times story that exposed the U.S. Navy Veterans Association, go to links.tampabay.com.

Navy Veterans former lawyer: 'I was duped' 12/04/10 [Last modified: Saturday, December 4, 2010 8:53pm]

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