(Tribune News Service) — A string of tobacco shops, car dealerships and a Virginia Beach bar accused of “unscrupulous business practices” have been off limits to military members for years, cut off from serving around 5% of Hampton Roads’ population.

The Armed Forces “off-limits list” dates back more than 30 years, with businesses shuffling on and off the radar of the Armed Forces Disciplinary Control Board every three months. With Hampton Roads being home to 18 Department of Defense installations and approximately 85,000 active duty service members, landing a spot on the list can put a business’ future in jeopardy. And getting off the list is no easy feat.

Of 11 establishments service members are prohibited from, eight have maintained a place on the list for more than nine years, despite having been permanently closed, while others changed their names or moved locations.

Manuel Thomas, coordinator for the board’s Norfolk-based region, said the goal of the off-limits list is to protect military members from illegal and unethical business practices. While Navy Region Mid-Atlantic is the sponsoring commander for the Armed Forces Disciplinary Control Board, the list applies to members of the Air and Space Force, Army, Marine Corps, Navy and Coast Guard.

Service members can become targets for unethical consumer practices because they have guaranteed income and the Uniform Code of Military Justice requires them to pay their bills on time, said Thomas, who oversees the complaint process for service members, due process against accused businesses and the actions of the local arm of the joint service board.

The local board is made up of members from each military branch, with community members and law enforcement agencies acting as advisers. Together, they monitor businesses within 75 miles of Norfolk, extending from southeastern Virginia to northeastern North Carolina.

Typically, complaints about businesses are submitted through the board’s website. The complaint then goes to the legal assistance command, where a judge advocate general attorney will try to resolve the issue for the sailor. If the attorneys are unsuccessful at resolving the issue, they will compile a list of the complaints. If there is more than one complaint, the issue is referred to the Armed Forces Disciplinary Control Board.

The board, Thomas said, vets the businesses — making sure they are licensed properly — and checks its archives to see if there is a history of complaints. A business with multiple complaints about its consumer practices will often receive a warning letter informing the owner of the potential to be placed off limits if the behavior continues.

“For example, if there is a contract that is unfair to the sailor and (the business) doesn’t void the contract, the board can in fact place the business off limits,” Thomas said.

Thomas described this as a process, with “a lot of back and forth” as the board, military attorneys and the business works to resolve the issue. He estimated that 95% of the businesses cooperate.

The most recent update came Feb. 14.

But a business can be placed on the list immediately if the Armed Forces board concludes the consumer practices are especially egregious. Such a decision was made in 2018 about a bar in Virginia Beach.

“We had a female sailor raped in the bathroom. The bar owner refused to allow Virginia Beach police to look at the camera at the establishment ... Right away we put (that business) off limits to protect our sailors,” Thomas said.

While the bar closed in 2019, it remains on the Armed Forces blacklist until the Armed Forces board and Naval Criminal Investigative Services determine the business will not reopen under a different name or at another location.

“We are cautious about if the business changes their name or moves to a different location. If they do that, under Department of Defense instruction, we can automatically leave them on the list. … So all the old names are on there because sailors are familiar with it,” Thomas said.

The list, Thomas said, also can help service members who might not realize they have been victimized. A now-closed Norfolk auto dealership, for example, was placed on the off-limits list in July 2014 after more than 80 service members issued complaints.

“We did not realize the magnitude (of the issue) because the business stayed under the radar for a long time. … A lot of times junior sailors will complain, but they are not aware of the mechanisms that exist to help them out,” Thomas said.

According to Thomas, the list is not a suggestion for service members, but rather an order. If caught conducting business with or entering the premises of the listed establishments, service members risk facing disciplinary action.

Businesses are invited to discuss the complaints with the board, and if they ultimately are deemed off limits, the business owner can appeal the decision.

“Our intention is not to shut a business down. It is to make sure they comply with what is right — not doing unethical or illegal business practices,” said Beth Baker, spokesperson for Navy Region Mid-Atlantic.

Carafello’s Auto Sales is currently going through the appeal process after the dealership rejoined the list last week. The business is accused of targeting junior sailors outside the Navy Exchange, offering them money to refer other junior sailors to the dealership.

The practice, known as “bird-dogging,” or using someone outside the business to help with a sale, is illegal according to Virginia law.

The board said Carafello’s has been “taking advantage of (junior sailors’) limited financial understanding or ability to walk away from a negotiation” by selling vehicles to sailors without a driver’s license. It is not illegal to sell a vehicle to someone without a driver’s license.

Ryan Carafello, owner of the dealership, told The Virginian-Pilot on Friday that his business has been “crippled” by the board’s decision to hastily blacklist it. The dealership caters to service members, who represent 98% of Carafello’s customers.

According to Carafello, the board detailed just five complaints about his business dating back to April 2019 — complaints he was unaware of until Carafello’s Auto Sales was printed in black and white at the bottom of Rear Adm. Christopher Gray’s order.

Carafello will go before the board March 8 to dispute the allegations. This is a process Carafello has been through once before, following similar allegations in 2015 that were resolved after he demonstrated the dealership was in compliance with Virginia motor vehicle dealer laws and regulations.

“We look forward to starting a constructive dialogue that will allow the Navy to understand our position and that we genuinely look out for sailors,“ said Carafello in an emailed statement.

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