IRS seizes records from U.S. Navy Vets group

By Laurence Hammack and Michael Sluss

BON AIR

In this suburban village southwest of Richmond, you have to look hard to find the address for the Virginia chapter of the U.S. Navy Veterans Association.

Sandwiched between a used-book store and a Jersey Mike's Subs restaurant is 2711 Buford Road -- a UPS Store, where box No. 408 is the only visible presence of an organization shrouded in mystery.

The nonprofit veterans group is under investigation in Virginia and at least six other states. Regulators have been unable to find its leaders, whose only known addresses are mail drops like the one here. Also in question is whether the millions raised by the group actually went to help Navy veterans.

And now, just when the Virginia chapter could take advantage of a new state law that it lobbied for, the group's leaders have made themselves even more scarce.

Earlier this year, the organization pushed for a law that would allow it to conduct telephone and mail fundraising in Virginia without having to register annually with state regulators. The successful lobbying came after the U.S. Navy Vets director, Bobby Thompson, contributed $67,500 to Virginia politicians.

One month after the law took effect, the U.S. Navy Vets has yet to apply for an exemption with the Virginia Department of Agriculture and Consumer Services, a step that would allow it to resume operations in the state.

The inaction comes after someone who identified himself as Allan Rosellini, commander of the U.S. Navy Vets' Virginia chapter, wrote in a May 10 letter to state regulators that the group was ready to make a "fresh start" in the state.

Since then, the organization has come under increased scrutiny across the country.

On Friday, agents with the Internal Revenue Service armed with a search warrant raided a residence in Tampa, Fla., where Thompson ran the U.S. Navy Vets for years, and seized records from other members of the group, IRS spokeswoman Kim Pennington said.

Although Pennington declined to elaborate, it was the first public confirmation of an IRS investigation. U.S. Sen. Jim Webb, D-Va., had asked the agency to investigate in May.

Investigations by attorney generals or consumer affairs agencies are also under way in at least seven states: Virginia, Florida, Hawaii, New Hampshire, New Mexico, Ohio and Oregon.

Ohio Attorney General Richard Cordray has been one of the group's most vocal critics, saying it appears the "phony outfit" raised millions for veterans and then diverted the money to political contributions.

Yet he appears to have little evidence to support that theory -- at least not yet.

"We are interested in locating such evidence or factual findings, but this is a difficult task because USNVA's representatives are unable to be located," said Holly Hollingsworth, a spokeswoman for Cordray.

Even the attorneys for the U.S. Navy Vets say they have been unable to find Thompson. An Ohio law firm was allowed last month to withdraw as counsel for the U.S. Navy Vets after it said Thompson had gone incommunicado in the midst of the state's efforts to freeze the group's bank accounts and shut down its mail drops.

Also leaving the U.S. Navy Vets' ship was Sam Wright, a lawyer who approached Virginia state Sen. Patsy Ticer, D-Alexandria, about sponsoring a bill that would exempt the group from annual registration requirements under the state's charitable solicitation laws.

Ticer agreed to carry the bill, which passed the General Assembly earlier this year. After reading a St. Petersburg Times series that raised questions about the Navy Vets, Ticer tried unsuccessfully to have the bill vetoed (her request came too late) and then gave away a $1,000 donation she received from Thompson.

Other politicians, including Gov. Bob McDonnell, did the same in May. The last holdout was Attorney General Ken Cuccinelli, who received $55,500 from Thompson, his campaign's second-largest individual donor.

After months of saying that he was giving Thompson the benefit of presumption of innocence -- and taking heat from Democrats -- Cuccinelli announced last week that he would donate the money to veterans associations that have yet to be identified.

The attorney general cited Thompson's "recent disappearance" as the reason for letting go of the contributions.

Longtime Virginia political analyst Bob Holsworth said "it was a little bit surprising how much time it took" for Cuccinelli to decide to give away the funds. But the issue may not be a long-term political problem for Cuccinelli, Holsworth said.

"The fact that he gave it back makes it much more difficult to politicize the issue three years from now," said Holsworth, a former Virginia Commonwealth University professor who now runs a nonpartisan website called Virginia Tomorrow.

In a May 31 letter to Ticer, Wright insisted that the U.S. Navy Vets is a legitimate organization. He also assured the senator that Thompson's political contributions did not come from funds raised by the U.S. Navy Vets.

"Commander Thompson is 64 years old and has earned resources over the course of his adult life," Wright wrote. "Although he chooses to live frugally, he has personal resources and has chosen to expend some of those resources on political contributions."

Thompson's former home, a rented duplex in a run-down section of a Tampa suburb, has prompted some to question how he could afford to make large political contributions.

Wright, who resigned as a U.S. Navy Vets attorney in June, declined to comment recently when asked if he still believes it to be a legitimate nonprofit.

"I no longer represent the organization, but the rules of ethics still apply with respect to information that I obtained prior to severing my relationship," he wrote in an e-mail.

Virginia regulators have said little about their inquiry of the group. It could be months before the state and federal investigations are completed.

Meanwhile, repeated messages left by The Roanoke Times at the number listed for the group's Virginia chapter have gone unanswered. So did a letter sent to Rosellini at the UPS mail drop in Bon Air, listed on the group's website as its office address.

Efforts to locate Rosellini, using public directories, Internet databases, search engines and other methods, turned up no one by that name in Virginia.

Another call last week to the group's state chapter yielded the same recorded greeting: "We'd like to take this opportunity, while we are away from our desks," a man's voice said before launching into a monologue about foreign threats to America and the importance of the U.S. armed forces.

"Please feel free to leave us a detailed message at the prompt," the message concluded. But, it added, "we unfortunately do not have sufficient staff to return every anonymous call we receive. And remember, have a great Navy day."

Roanoke Times news researcher Belinda Harris contributed to this report.