Highlights from the New Yorker/The Trace

NRA’s Longtime CFO Allegedly Embezzled Over $1 Million From His Previous Company, Former Colleagues Say

According to a new report from the New Yorker/The Trace, the NRA’s longtime chief financial officer Woody Phillips, who worked at the NRA alongside executive vice president Wayne LaPierre for 26 years, was fired from his previous job for allegedly embezzling more than $1 million. The New Yorker/The Trace spoke with Mary Hughes, the former accounts payable manager at Phillips’ previous employer, Wyatt Company, who described uncovering a pattern of allegedly fraudulent invoices penned by Phillips and deposited to his personal bank account. Three of Hughes’ colleagues from the time confirmed her account to the New Yorker/The Trace.

According to the New Yorker/Trace (emphasis added):

  • “In June, 1991, Mary Hughes, the accounts payable manager at the Wyatt Company, an employee-benefits consulting firm based in Washington, D.C., received a phone call from someone trying to reach the firm’s chief financial officer, Wilson H. Phillips, Jr., who goes by Woody. The person was calling from Associates Relocation Management Company, a firm in Texas, which Wyatt frequently used to relocate employees. Wyatt, they said, owed Associates $45,000. Hughes checked Wyatt’s system and determined that Associates had been paid. To prove it, she faxed the company a copy of the check. ‘They called back less than five minutes later,’ Hughes recalled. ‘They told me the check had not been deposited into their bank account.’
  • “Instead, it had been routed to an account in Maryland. Hughes called the Maryland bank that had cashed the check and submitted a fraud report to recoup the funds. ‘They gave me records saying who the account belonged to,’ Hughes said. ‘And, sure enough, it was Woody’s.’ In the next several hours, Hughes went through all of the payments Wyatt had made to Associates during the previous year, and she found multiple instances in which checks had been deposited into Phillips’s account. All told, Hughes discovered that Phillips had embezzled at least $1 million from the firm.
  • Less than a week after Hughes uncovered the fraud, Phillips returned to Wyatt for a meeting with lawyers. According to Hughes, he immediately paid the company $500,000, but he owed at least half a million more. Phillips made monthly interest payments on his balance to Wyatt until at least 2001, when Hughes was laid off.
  • “By that time, Phillips had been overseeing the NRA’s finances for nearly a decade. Philip Hackney, an attorney who used to work in the Internal Revenue Service’s chief counsel’s office, told me that the disclosure of Phillips’s past fraud should trigger a close review of his work at the NRA. ‘A history of embezzlement means you can’t have confidence in anything that he’s done,’ Hackney said. ‘Every transaction now merits serious scrutiny.’
  • “Phillips held his role at the NRA until 2018. According to annual reports filed with Massachusetts, Phillips, as the NRA’s treasurer and chief financial officer, was solely responsible for ‘custody of funds,’ ‘distribution of funds,’ and ‘custody of financial records.’ He was also one of two officials authorized to sign checks. Between 2005 and 2017, the years for which the organization’s tax filings are publicly available, the NRA paid Phillips more than $10 million.”

While serving as the NRA’s chief financial officer, Phillips simultaneously held the same position at Memberdrive, “a short-lived marketing startup that brokered deals between membership organizations and businesses willing to pay royalties for their endorsements,” according to the New Yorker/The Trace. One of Memberdrive’s top clients was the NRA, and one of Phillips’ colleagues at the company was Susan LaPierre, the wife of Wayne LaPierre. Another colleague was the spouse of the NRA’s then-director of membership.

This isn’t the first time Woody Phillips has come under scrutiny. According to a leaked internal memo written by half a dozen NRA accountants and presented to the organization’s audit committee first reported in May, the NRA made “payments” to the “significant other” of Phillips. An article by The Trace about the memo quotes an NRA attorney denying that the person hired was “any ‘significant other’ of the N.R.A.’s former C.F.O.” but acknowledging “[t]he NRA hired an I.T. consulting firm with links to a social friend of Mr. Phillips.”