Was it gambling? For years, the leaders of Allied Veterans of the World maintained publicly that its chain of strip mall Internet gaming centers were perfectly legal. Now a former employee says those that worked inside knew all along while it may have been called an Internet center operating a sweepstakes, but it was most certainly a casino.
Wallace worked at the Allied Vets location off North Woodland Boulevard in DeLand for more than a year. That location in DeLand was operated by Coastal Games LLC, one of the companies listed by the state in its takedown of Allied Vets. According to documents obtained by Eyewitness News, the Volusia County Bank of America account opened by the operators of Coastal Games LLC received deposits totaling $19,613,785 between Jan. 1, 2008 and March 31, 2012, with $208,833 in the account when authorities froze the assets of the strip-mall centers.
"One good day, on a Friday, we had about $80,000 to $85,000 in the safe alone and that’s not even including the cash in the register," said Wallace. "(Customers would) come in the morning and not leave until that night, they’d spend all their money, come back with more money, lose all that."
At the height of its operation, Allied Veterans of the World operated 49 strip mall gaming locations across Florida, with 16 in central Florida. The multimillion-dollar-a-year business billed itself as a sweepstakes that donated its proceeds to the legitimate charity Allied Veterans of the World; in March 2013 that all ended.
In a series of highly orchestrated sweeps, law enforcement arrested 57 people and froze more than $100 million in bank accounts. The state called the Internet cafes nothing more than illegal casinos operating on the fringes of the law with the majority of profit going not to veterans as the group claimed, but instead to a select few leaders of the group.
"We were told to tell them that either 95 or 97 percent of all of the cash coming in was being donated to the Allied Veterans organization," said Wallace.
While they were open, the Internet centers featured letters from veterans thanking Allied Veterans for donations. The group routinely boasted about its charitable donations, however, state records show less than 3 percent of the money collected ever made its way to veterans; a fact kept secret from employees.
"I was angry when I found out. I thought that they were donating what they really said that they were," said Wallace.
Since the arrests, the state has dropped charges on almost a dozen defendants and taken plea deals from two top leaders. In August former national commander Johnny Duncan pleaded no contest to four counts of maintaining an illegal lottery and one count of money laundering, days later, Allied Vets National Commander Jerry Bass pleaded no contest to two counts of pleaded no contest to maintaining an illegal lottery; neither man will serve jail time. On Oct. 11 a Seminole County jury returned a guilty verdict in the state’s case against Jacksonville attorney Kelly Mathis, finding the one time legal adviser to Allied Vets guilty on 103 of 104 charges ranging from possessing slot machines and operating a lottery to racketeering.
In the trial, the state maintained that it was Mathis who directed the organization as to how to operate, telling leaders what they could and could not do in accordance with state and local law. Wallace says managers were very specific about what to call the machines and games, he says they were even given a script to read from to new players telling them they were purchasing "Internet time" and not "gambling."
"We were real strict about what we couldn’t say and what we had to say," said Wallace. "If people came up to us and said they wanted to cash out, we had to say do you want to redeem your sweepstakes."
The state still has charges pending against several dozen defendants. Sentencing for Mathis is scheduled for later this year.