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Editorial: A strong message on scams

After a six-week jury trial, Bobby Thompson was convicted Thursday in Cleveland on 23 charges of fraud, money laundering and identity theft.

Associated Press

After a six-week jury trial, Bobby Thompson was convicted Thursday in Cleveland on 23 charges of fraud, money laundering and identity theft.

Bobby Thompson's conviction for running a fraud charity is a win for legitimate nonprofits and the donating public. The state of Florida, especially, should heed the lessons of Ohio's successful prosecution of the Tampa-based scheme. State regulators need new tools to separate reputable charities from sham operations. And state lawmakers should adopt more sweeping reforms to keep Florida from becoming ground zero for hustlers. Given the broad role charities play in society, the government has an interest in giving the donating public the confidence it needs to keep contributing to worthy civic causes.

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Thompson, who ran the U.S. Navy Veterans Association from a run-down duplex in Ybor City, was convicted Thursday in a Cleveland courtroom on 23 charges of fraud, money laundering and identity theft. Prosecutors said the man also known as John Donald Cody masterminded a $100 million charity scam, a fraud first exposed in 2010 by Tampa Bay Times staff writers Jeff Testerman and John Martin.

The jury verdict came after a six-week trial that featured more than 100 exhibits, revealing a sham that siphoned donations for Thompson's personal use, aided largely through the use of stolen identities. The conviction capped a three-year effort by Ohio to hold Thompson accountable for his operation, which raised millions in donations but gave little assistance in return to veterans. Florida filed criminal charges against Thompson, too, but did not pursue them once he fled the state.

The verdict testifies to the hard work by Ohio authorities, who saw the negative impact that this sham operation would have on charitable giving at large. The state presented evidence that Thompson lied on registrations for Navy Veterans with the IRS and state regulators. He invented fictitious officers and a paper trail to establish Navy Vets as a legitimate enterprise, officials testified, using weak regulatory laws and relying on the work of professional fundraisers, who collected money from hundreds of thousands of Americans that was intended for needy veterans. As one juror — an Army veteran — said after the trial: "I know I'm going to do some investigating before I give to a charity."

Thompson, 66, faces a minimum of 10 years in prison when he is sentenced next month. But it's time Florida turned its attention to closing the loopholes that enabled the phony charity to thrive. Adam Putnam, Florida's commissioner of agriculture and consumer services, the agency that oversees charities, is on the right path by moving to put more information into donors' hands. He intends to create a website that easily displays how much nonprofits spend on fundraising and administration versus actual programs. And he would tighten a charity's spending on overhead as a condition for receiving tax-exempt status.

Putnam, though, needs the Legislature's help. The problem, as a recent, yearlong investigation by the Times and the Center for Investigate Reporting showed, is hardly isolated to Navy Veterans. Florida is home to 11 of the nation's 50 worst charities. Preying on people's good intentions is big business, propping up a string of for-profit fundraisers or unscrupulous charity operators who often pocket most of the proceeds. Lawmakers should back Putnam's proposals to require background checks of the telemarketers working for for-profit fundraising companies, stiffer fines for rogue charities, and new reporting requirements to make it harder to run sham operations. The verdict in the Thompson case should bring an urgency to these reforms, for the first step in strengthening the impact of America's charities is instilling a sense of confidence among the donating public.

Editorial: A strong message on scams 11/15/13 [Last modified: Friday, November 15, 2013 5:47pm]
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