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Ohio opens case in $100M charity fraud trial

CLEVELAND — A mysterious onetime fugitive charged with running a $100 million multistate Navy charity fraud was portrayed at his trial Monday by prosecutors as a lying thief and by his defense as a law-abiding fundraiser.

Assistant Ohio Attorney General Brad Tammaro told the jury that the defendant, who calls himself Bobby Thompson but has been identified by authorities as Harvard-trained lawyer John Donald Cody, 67, was the mastermind of the alleged scam.

But Joseph Patituce, the court-appointed defense attorney, said the defendant’s work was legal and followed federal tax regulations governing charities.

The defendant, who sat passively and took notes at the trial, has been charged with defrauding donors to a reputed charity, the United States Navy Veterans Association based in Tampa, Fla.

He showered politicians, often Republicans, with political donations. Last week, the judge rejected a renewed defense request to subpoena testimony from leading Ohio Republicans including U.S. House Speaker John Boehner.

“This defendant was responsible for taking millions of dollars out of Ohio,” Tammaro said. He was a thief unable to tell the truth, Tammaro said.

Nearly $3 million was donated by people in Ohio to the charity, according to Tammaro, and “that money disappeared — gone.”

Tammaro said that the defendant shifted the money among various accounts, paid fundraising costs and a small staff, and that the rest disappeared in ATM cash withdrawals and through checks made out to the defendant or to cash.

Patituce told jurors the prosecution lacked proof of the charges and hinted again that the defense would claim the defendant was involved in a secret government project.

To buttress the argument, Patituce displayed a photograph of the defendant with former President George W. Bush. His client will testify on his own behalf, Patituce said.

Using a white board, Patituce detailed the organizational structure of the charity and said it was authorized to make political contributions and had done so legally.

Jeff Testerman, the retired Tampa Bay Times reporter who broke stories that helped uncover the alleged fraud, was the first witness and testified that he couldn’t reach people identified by the charity as its accountant or internal auditor.

Testerman started poking around when he heard the defendant identify himself as a retired Navy commander. Instead, Tammaro said the defendant was a captain in the Army and Army Reserve and left the service when he twice was denied promotion to major.

Some of the charity’s donations to nonprofits like the USO were made after the newspaper began investigating, Testerman told jurors.

Under cross-examination as the defense tried to show it wasn’t a one-man operation, Testerman acknowledged he was familiar with several people who had volunteered with the charity or served as a legal adviser.

Testerman, asked by the prosecutor how many people he had managed to confirm out of the 60,000 association members listed by the charity, responded, “One” — Bobby Thompson.

The association’s lawyer, Helen Mac Murray, identified binders full of check copies made out to Thompson, top assistants or to cash and signed by him or with a signature stamp.

She testified that Thompson said his association would not operate in nine or 10 states because they required audits.

“The association did not want to provide that,” testified Mac Murray, a law partner of former Ohio Attorney General Betty Montgomery. Records show their firm was paid more than $277,000 in legal fees by the charity.

The defendant disappeared for almost two years after his 2010 indictment. He was tracked and arrested last year in Portland, Ore., where agents and deputy marshals found him with fake IDs and a suitcase containing $980,000 in cash.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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