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Allied Veterans of the World, a group that once had an internet cafe located north of Chiefland last year, is being accused by a multi-state task force of Florida and federal officials of being an illegal gambling business.
The local, state and federal law enforcement officials and prosecutors who announced on March 13 that 57 individuals are being charged for their roles in an organized $300 million conspiracy orchestrated by Allied Veterans of the World, according to a task force press release. And, although not charged, Florida Lt. Gov. Jennifer Carroll, resigned the day of the announcement after being questioned by investigators with the task force. Her public relations firm did business with Allied Veterans.
The task force has also said that out of the $300 million taken in, $90 million went to pay the officers of the business that touted itself as a non-profit group helping veterans and only 2 percent of the $300 million actually went to help veterans and veterans organizations.
Operation “Reveal the Deal” uncovered a sophisticated racketeering and money laundering scheme stemming from 49 illegal gambling centers operating under the guise of “internet cafes.” The organization falsely claimed to be a charitable veterans’ organization, but instead deceived the public and government while lining the pockets of its operators.
Officers have been busy executing 54 search warrants and 57 arrest warrants in 23 Florida counties and five other states, rounding up individuals and evidence involved in the conspiracy. Investigators are seizing slot machines and records from Allied Veterans of the World gambling centers across the state, as well as 80 vehicles and vessels, 170 properties, and 260 bank accounts estimated in the tens of millions of dollars.
Allied Veterans of the World was led by four co-conspirators: Johnny Duncan, 62, of Boiling Springs, S.C., Jerry Bass, 62, of Jacksonville, Chase Burns, 37, of Fort Cobb, Okla., and Kelly Mathis, 49, also of Jacksonville. Duncan is the former national commander of the organization, Bass is the current commander, and Mathis is the organization’s attorney. Burns owns and operates International Internet Technologies and provided the software used by the gambling centers.
While the organization is federally registered as a 501(c)(19), a tax-exempt veterans organization, and touts that it operates for charitable purposes, investigators allege it ran gambling centers and illegal slot machines, funneling the illegal proceeds through a sophisticated web of for-profit corporations that paid off the Allied Veterans of the World management, software provider and lawyer.
More than 100 for-profit corporations and a combination of shell companies and internet cafes were utilized to conceal the illegal activity and funds generated by the gambling centers. Investigators found that during the period January 2008 to January 2012, less than 2 percent of the $300 million in gambling center revenues was given to charity.
Investigators believe the four co-conspirators received a combined more than $90 million in proceeds from the scheme. They were charged with Racketeer and Influenced Corrupt Organizations (RICO); RICO conspiracy; manufacture, sale, possession of slot machines; lottery; keeping gambling houses; and money laundering. Duncan was booked into the Spartanburg County Detention Facility (South Carolina), Bass was booked into the Jacksonville Sheriff’s Office Jail, Burns was booked into the Caddo County Jail (Oklahoma), and Mathis was booked into the John E. Polk Correctional Facility in Seminole County.
The other 53 conspirators are associated with the illicit enterprise and operated the gambling centers, hiding their portion of a combined $194 million in gambling proceeds. These subjects reside in Florida, Alabama, South Carolina, Pennsylvania, Nevada and Georgia. They face multiple counts of gambling, slot machines, lottery, money laundering and RICO. As of 1 p.m. today, 49 have been arrested.
Among them are Nelson Cuba, 48, and Robert Freitas, 47, both of Jacksonville. The two are law enforcement officers who serve as the president and vice-president of the Fraternal Order of Police’s Jacksonville Lodge. The investigation found they received more than $500,000 through a shell corporation during an 18-month period. The two withdrew cash weekly, attempting to avoid detection by removing amounts just below mandatory federal reporting requirements. Cuba and Freitas both face the additional money laundering charge of structuring transactions to evade reporting or registration requirements. They were booked into the John E. Polk Correctional Facility in Seminole County.
All charges are first degree felonies and all of the subjects arrested will be initially held on a no bond status.
Operation “Reveal the Deal” began in July 2009 and was conducted by the Seminole County Sheriff’s Office, the Volusia County Sheriff’s Office, the Jacksonville Sheriff’s Office, the Florida Department of Law Enforcement, the Internal Revenue Service, and the United States Secret Service. The agencies worked in partnership with the Florida Attorney General’s Office of Statewide Prosecution and the United States Attorney’s Office.
Florida Agriculture and Consumer Services Commissioner Adam H. Putnam also said his agency, which registers non-profit groups making solicitations in the state, has been involved in a lawsuit with Allied Veterans of the World since November 2011 for failure to provide required documentation as evidence of its charitable activity.who said Allied Veterans.
He also called for a state ban on internet cafes. “The case against Allied Veterans of the World makes clear that internet casinos are a breeding ground for illegal activity,” said Putnam. “I intend to work with the Legislature to shut down these organizations and keep them from defrauding and scamming their clients and, in this case, veterans who were never given their share of the promised proceeds.”
“Through this case, we have learned more about the level of deception between the support they claimed to provide to veterans and what they have actually provided,” Putnam said.
Charities are regulated by this department and must provide paperwork, including information regarding income and charitable contributions, on an annual basis. While internet casinos are not required to register with this department, those that claim to be a “sweepstakes program” and offer prizes of more than $5,000 must file paperwork with the agency.