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A Times Editorial

Editorial: Sentence sends message to scam artists

The 28-year prison sentence Monday in the charity fraud case of the Tampa-based U.S. Navy Veterans Association should send a warning to scam artists and regulators alike. The state of Ohio did the country a service by pursuing the man who calls himself Bobby Thompson, who ran a $100 million fraud that preyed on real veterans and a generous public eager to honor their service. The heavy prison term and $6 million fine should send a message to similar operations. The trial's outcome also should inspire the federal government and the states to go further in cracking down on sham operations that undermine public faith in charitable giving.

The sentence imposed by Judge Steven Gall wasn't as severe as the 41-year prison term that Ohio's attorney general was seeking. But it's substantial enough to keep the 67-year-old Thompson (who authorities say is Harvard-trained attorney John Donald Cody) off the streets perhaps for good. The stiff fine, while amounting to only a fraction of the value of the sham operation, should send a message to charities that they could pay a high price for violating the public's trust. This punishment was appropriate, and authorities across the nation should see it as a guide for the attention and vigilance they need to show in policing these nonprofits.

Thompson was convicted in November of racketeering, theft, money laundering and 12 counts of identity theft. His prosecution followed a series of reports in the Tampa Bay Times by staff writers Jeff Testerman and John Martin chronicling the scale of the sham enterprise, which operated in 41 states and was based in Ybor City. Before Thompson dropped out of site, he lavished politicians with political contributions, and while his operation raked in tens of millions, little of that went to people actually in need. When he was arrested last year in Oregon, authorities found fake ID's and a suitcase with nearly $1 million in cash.

Monday's sentence closes an embarrassing episode for Florida regulators, who failed to prevent Thompson from fleecing donors, and whose inaction helped sour the public confidence necessary for charitable entities to survive. Ohio already has distributed about $100,000 to veterans that it seized from Thompson, and Florida should look to close out this case on a positive note as well. It needs to provide regulators with the resources they need to monitor the leadership and track records of charitable groups. It should impose higher penalties for fraud and make it easier for the public to obtain a nonprofit's financial records. And legislators should close a legal loophole that enables charity mangers to evade a law aimed at preventing felons from being hired to work the phones. As the Times' Kris Hundley reported this week, that loophole has already caused the collapse of one recent case against a charity operating from the bay area.

Sham charities operate outside of the law, and the only way to deal with them is to get tough by increasing the risks and costs of getting caught. The public also needs confidence that the government is keeping the charities honest. Otherwise the fear of being cheated will significantly reduce charitable giving, which is vital to meeting so many community needs.

Editorial: Sentence sends message to scam artists 12/16/13 Editorial: Sentence sends message to scam artists 12/16/13 [Last modified: Monday, December 16, 2013 9:33pm]

    

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A Times Editorial

Editorial: Sentence sends message to scam artists

The 28-year prison sentence Monday in the charity fraud case of the Tampa-based U.S. Navy Veterans Association should send a warning to scam artists and regulators alike. The state of Ohio did the country a service by pursuing the man who calls himself Bobby Thompson, who ran a $100 million fraud that preyed on real veterans and a generous public eager to honor their service. The heavy prison term and $6 million fine should send a message to similar operations. The trial's outcome also should inspire the federal government and the states to go further in cracking down on sham operations that undermine public faith in charitable giving.

The sentence imposed by Judge Steven Gall wasn't as severe as the 41-year prison term that Ohio's attorney general was seeking. But it's substantial enough to keep the 67-year-old Thompson (who authorities say is Harvard-trained attorney John Donald Cody) off the streets perhaps for good. The stiff fine, while amounting to only a fraction of the value of the sham operation, should send a message to charities that they could pay a high price for violating the public's trust. This punishment was appropriate, and authorities across the nation should see it as a guide for the attention and vigilance they need to show in policing these nonprofits.

Thompson was convicted in November of racketeering, theft, money laundering and 12 counts of identity theft. His prosecution followed a series of reports in the Tampa Bay Times by staff writers Jeff Testerman and John Martin chronicling the scale of the sham enterprise, which operated in 41 states and was based in Ybor City. Before Thompson dropped out of site, he lavished politicians with political contributions, and while his operation raked in tens of millions, little of that went to people actually in need. When he was arrested last year in Oregon, authorities found fake ID's and a suitcase with nearly $1 million in cash.

Monday's sentence closes an embarrassing episode for Florida regulators, who failed to prevent Thompson from fleecing donors, and whose inaction helped sour the public confidence necessary for charitable entities to survive. Ohio already has distributed about $100,000 to veterans that it seized from Thompson, and Florida should look to close out this case on a positive note as well. It needs to provide regulators with the resources they need to monitor the leadership and track records of charitable groups. It should impose higher penalties for fraud and make it easier for the public to obtain a nonprofit's financial records. And legislators should close a legal loophole that enables charity mangers to evade a law aimed at preventing felons from being hired to work the phones. As the Times' Kris Hundley reported this week, that loophole has already caused the collapse of one recent case against a charity operating from the bay area.

Sham charities operate outside of the law, and the only way to deal with them is to get tough by increasing the risks and costs of getting caught. The public also needs confidence that the government is keeping the charities honest. Otherwise the fear of being cheated will significantly reduce charitable giving, which is vital to meeting so many community needs.

Editorial: Sentence sends message to scam artists 12/16/13 Editorial: Sentence sends message to scam artists 12/16/13 [Last modified: Monday, December 16, 2013 9:33pm]

    

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