The more that is learned about the U.S. Navy Veterans Association, the clearer it is that no government agency takes responsibility for making sure charities are who they say they are and do what they say they do. The latest example: When the IRS scrutinized at least one arm of the Tampa-grown group in 2008, it didn't dig very deep and allowed the tax-exempt nonprofit to continue its high-level scam with impunity. It's also clear now that one man did not perpetrate this fraud alone. At least three lawyers lent his ruse an air of legitimacy, facilitating his exploitation of Americans' desire to help veterans.
The IRS will not comment on its one-day examination two years ago of the Connecticut chapter of U.S. Navy Veterans Association. It appears to be the only agency to ever examine the group's operations before the St. Petersburg Times raised questions in March. But the IRS, like a host of regulators in various states including Florida, failed to uncover the deception. As the Times' Jeff Testerman and John Martin reported last week, a man posing as the group's development director, "Lt. Cmdr. Bobby Thompson," evaded IRS scrutiny using a box of likely fraudulent documents and with a lawyer standing by.
Apparently the IRS didn't care that the three officers listed on the Connecticut group's tax forms weren't in attendance. It appears the IRS never checked if they lived at the addresses listed. The Times has been unable to verify the men exist at all.
Such fake names are at the heart of Thompson's grift and should inform future regulations regarding validating charities' filings. The practice also raises questions about whether those who worked with the group, including lawyers, were ever suspicious or complicit in the massive fraud being perpetuated. Thompson claimed the volunteer group raised $27.6 million in 2009, had 66,000 members and included an impressive list of officers across the country.
But after months of searching, the Times was unable to verify more than a handful of people tied to the group. Others said their names had been used without their knowledge. And Thompson stole his identity from a Washington state man. Now most of the money and Thompson — who disappeared late last year after the Times began asking questions — cannot be found.
The group's attorneys — including two high-profile lawyers who worked doggedly in recent months to protect the group from scrutiny — say they were duped. General counsel Helen Mac Murray of Ohio even went so far as to tell the Times that e-mail and voice mail messages left for the group might be regarded as criminal "stalking." And special counsel Samuel F. Wright lobbied the Virginia Legislature to pass a law exempting veterans groups from state registration and defended the group's reputation to the U.S. Department of Veterans Affairs — after Thompson's charade had been exposed in Florida.
Lots of people, apparently, were looking out for the U.S. Navy Veterans Association. But no one was looking out for hardworking Americans who parted with their money to help veterans. That's embarrassing and unacceptable. Congress and the Florida Legislature should change that by improving the regulation and policing of charities.