57 charged in $300M Allied Veterans conspiracy

ORLANDO, Fla. — Local, state and federal law enforcement officials and prosecutors said Wednesday they have charged 57 people for their alleged roles in an organized $300 million conspiracy orchestrated by Allied Veterans of the World.

Authorities said "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 or strip mall casinos.

Authorities said Allied Veterans falsely claimed to be a charitable veterans' organization, but instead deceived the public and government while lining the pockets of its operators.

"[It was] a group that has deceived the public, deceived veterans, deceived city county and state government," said Seminole County Sheriff Don Eslinger.

On Wednesday, Florida Lt. Gov. Jennifer Carroll announced her resignation a day after she was questioned by authorities investigating Allied Veterans, which she once represented.

She has not been charged in the investigation. She said she doesn't believe she is a target of investigators, and released a statement that read, "I simply refuse to allow the allegations facing a former client of my public relations firm to undermine the important work of the Governor and his administration."

On Tuesday, law enforcement officers began executing 54 search warrants and 57 arrest warrants in 23 Florida counties and five different states, rounding up suspects and evidence involved in the alleged conspiracy.

Investigators continue to seize slot machines and records from Allied Veterans of the World gambling centers across Florida, as well as 80 vehicles and vessels, 170 properties and 260 bank accounts estimated in the tens of millions of dollars.

Allied Veterans locations in Orange City, Apopka and Eustis were among the raids on Wednesday.

At the Allied Veterans location on Enterprise Road in Orange City, investigators had a locksmith pop the locks to the business and about 10 law enforcement officers went inside to serve the search warrant.

From Skywitness 9 HD, it didn't appear anyone was at the business at the time of the raid.

However, several customers walked up to the location and were disappointed to find it closed when it's typically open.

Some of those customers said they put hundreds of dollars on their playing cards Tuesday, but they didn't cash them out, so they planned on playing the slots Wednesday.

Now they're worried they'll never get their money back.

Investigators spent the morning gathering evidence, taking computers out of the business and loading them in the back of a Sheriff's Office vehicle.

Earlier, investigators went to a warehouse in Port Orange, where they believe slot machines used in central Florida were being repaired.

Allied Veterans was led by four Johnny Duncan, 62, of Boiling Springs, S.C., Jerry Bass, 62, of Jacksonville, Fla., Chase Burns, 37, of Fort Cobb, Okla., and Kelly Mathis, 49, also of Jacksonville, Fla.

Duncan serves as the former national commander of the organization, Bass is the current commander, and Mathis is the organization's attorney.

Authorities said the enterprise was really kept alive by Mathis.

"He profited at least $6 million from the gambling venture," said FDLE Commissioner Gerald Bailey.

Investigators said Mathis tried to convince local governments the operations were legitimate.

Burns owns and operates International Internet Technologies and provided the software used by the gambling centers.

The organization is federally registered as a tax-exempt veterans' organization, and touts that it operates for charitable purposes, authorities said.

Instead, investigators claim 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 strip mall casinos were utilized to conceal the illegal activity and funds generated by the gambling centers, authorities said.

Investigators said they that during the period of January 2008 to January 2012, less than 2 percent of the $300 million in gambling center revenues was given to charity.

Investigators believe Duncan, Bass, Burns and Mathis received a combination of more than $90 million in proceeds from the scheme.

All four were charged with racketeering and influenced corrupt organizations (RICO), RICO conspiracy, manufacture, sale, possession of slot machines, lottery, keeping gambling houses and money laundering.

Duncan and Burns were booked into jails in Oklahoma and South Carolina.

Bass was booked into the Duval County Jail, while Mathis was booked in the John E. Polk Correctional Facility in Seminole County.

As for the other 53 alleged conspirators, authorities said they're associated with the illicit enterprise and operated the gambling centers, hiding their portion of a combined $194 million in gambling proceeds.

The suspects are from several states, including Florida, Alabama, South Carolina, Pennsylvania, Nevada and Georgia. Each suspect faces multiple counts of gambling, slot machines, lottery, money laundering and RICO.

Among those arrested were 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, authorities said.

Cuba and Freitas 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.

All charges are first-degree felonies and all of the suspects arrested will be initially held on a no bond status, authorities said.

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.

WFTV