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Retired Navy officer helps run company that targets troops with bad credit

Aug. 6, 2014 - 08:54PM   |  
The top lawyer for USA Discounters, which has outlets near the nation's 11 largest military installations, is a retired senior Navy officer.
The top lawyer for USA Discounters, which has outlets near the nation's 11 largest military installations, is a retired senior Navy officer. (Mike Morones/Staff)
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USA Discounters knows a lot about the military.

The big-box retailer operates close to some of the nation’s biggest military installations, selling furniture, electronic gear, car rims and jewelry — often offering high-interest loans and getting troops to sign fine-print documents surrendering a portion of their pay if they default.

In fact, the company seizes the pay of more active-duty troops than any company in the country, military records show.

And one of its top officials is a recently retired senior military officer, Navy Capt. Timothy Dorsey.

Dorsey, who officially retired from the Navy Reserve in June, has served for years as USA Discounters’ general counsel and vice president, and in recent weeks has been the Virginia-based company’s public voice as it has come under fire for its frequent targeting of service members in wage-garnishment lawsuits.

But many inside the Navy also know Dorsey as the pilot at the center of a bizarre mishap in 1987 when, as a young F-14 Tomcat pilot, he mistakenly shot an Air Force F-4 Phantom out of the sky during a war-game exercise. The missiles Dorsey unleashed sent the fighter jet hurtling into the Mediterranean Sea, but both pilots ejected and survived.

A Navy investigative report later called it a “basic error in judgment” and “an illogical act.”

Dorsey, whose father was a prominent naval aviator and retired as a three-star admiral, restarted his Navy career as an intelligence officer.

In 2012, he again drew controversy when his name appeared on a nomination list for promotion to one-star admiral. Many sailors were stunned that an officer cited in a mishap as serious as the 1987 shootdown would be promoted to that level of leadership.

The controversy derailed his nomination, and Dorsey retired at the O-6 paygrade in June, Navy records show.

In recent years, Dorsey, now 51, has helped USA Discounters file lawsuits against service members who run up bills they can’t pay. While the company does not exclusively lend to service members, it has stores near each of the country’s 11 largest military installations, according to an in-depth investigative report by ProPublica in July.

The company’s website states prominently: “Everyone is encouraged to apply for credit. Slow credit, no credit and bad credit are OK. Active military and government employees are always approved for financing.”

Critics say the company draws in troops by offering generous credit and tacks on loan fees or other charges, ultimately assuming that the loans can be easily collected through the military’s unique paycheck allotment system that garnishes troops’ basic pay, according to the ProPubilca article.

The company also files most of its lawsuits in Virginia regardless of where the service member is located, making it almost impossible for some troops stationed far away to attend the court hearings and respond to the loan-related lawsuits, according to the ProPubilca report.

USA Discounters issued a statement in the wake of the report, saying it “inaccurately portrays the practices and policies of our company and our dealings with military customers.”

But the statement cited no specific inaccuracies and said company officials were unable to discuss individual cases due to confidentiality requirements.

In a separate email statement to Military Times, Dorsey said he has treated service members with respect in both his military and civilian positions.

“I am proud of my 30 years as a Navy officer in service to this country. I am also proud of the work USA Discounters has done in supporting military service members as well as programs aimed at veterans, youth and military families,” Dorsey said.

“To suggest that someone who wears the uniform of his country would treat fellow service members in any capacity with anything other than honor and respect is both personally offensive and factually without merit,” he said.

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