FDLE: 57 charged in Florida gambling scandal
A total of 57 people are facing hundreds of charges after a joint federal, state and local investigation into Jacksonville-based Allied Veterans of the World. State officials say they found a racketeering and money laundering scheme operating out of 49 of its locations operating under the guise of Internet cafes.
“It is shameful that Allied Veterans of the World allegedly attempted to use the guise of a charitable organization to help veterans in order to lend credibility to this $300 million illegal gambling scheme,” stated Attorney General Pam Bondi. "This insults every American that ever wore a United States military uniform."
SLIDESHOW: Faces of those arrested
According to the Florida Department of Law Enforcement, Allied Veterans of the World was led by four co-conspirators: Jerry Bass, 62, and Kelly Mathis, 49, (pictured, below) both of Jacksonville; Chase Burns, 37, of Fort Cobb, Okla. and Johnny Duncan, 62, of Boiling Springs, S.C.
Duncan served as the former national commander of the organization, Bass was the current commander, and Mathis was the organization’s attorney. Burns owns and operates International Internet Technologies and provided the software used by the gambling centers.
The others arrested include the president and vice president of the Jacksonville Fraternal Order of Police -- the union representing the officers with the Jacksonville Sheriff's Office.
Authorities say Nelson Cuba, 48, and Robert Freitas, 47 -- both sworn law enforcement officers -- received more than $500,000 through a shell corporation during an 18-month period.
T he two allegedly 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.
The other 51 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 live in Florida, Alabama, South Carolina, Pennsylvania, Nevada and Georgia. They face multiple counts of gambling, slot machines, lottery, money laundering and racketeering.
DOCUMENTS: 57 charged in "Operation Reveal the Deal"
Charging affidavit | Search warrant of Allied Veterans locations
Seizures, bank records, correspondence, depositions, etc.
As of 1 p.m. Wednesday, 49 of the 57 people indicted in connection with the operation were arrested. The six men and one woman booked into Jacksonville's jail were transferred to Seminole County on Wednesday, where they will be prosecuted.
Of the 49 arrested, 14 were picked up in northeast Florida, including Bass.
The others were Mathis, Allied Veterans Secretary Michael Davis, Cuba, Freitas, Tamara Gross, Mazen Salloum, Salim Saloum and Samer Saloum, all of Jacksonville; John Hessong, of Hilliard; Moses Ramos, of St. Augustine; Conrad Rowe, of Atlantic Beach; Zaher Salloum, of St. Johns County; and Jonathan Shave, of Fernandina Beach.
All charges are first-degree felonies and all those arrested were initially held without bond. (Chase and Kristin Burns and Johnny Duncan pictured below)
Gerald Bailey, commissioner of FDLE says the suspects lined their pockets with profits from the illegal gambling operation, buying 175 properties, 80 vehicles, including high-dollar sports cars and boats with the proceeds of this "web of fraud and corruption."
A total of 292 bank accounts totaling more than $64 million were frozen as part of the investigation.
Nearly 50 Internet sweepstakes cafes run by Allied Veterans were closed and searched an Tuesday -- including all eight in Jacksonville, which recently changed their names to "Elite."
Channel 4's cameras witnessed boxes of documents and computers taken as evidence in the investigation.
According to an Internal Revenue Service affidavit filed in federal court, Allied Veterans evolved from a charitable organization that ran bingo games and held bake sales for veterans beginning in 1979 to a group suspected of operating more than 40 illegal for-profit gambling locations around Florida. The veterans' charity was a fraud, according to the IRS.
"In an effort to mislead the public into believing that it is not profiting from an illegal gambling enterprise, Allied Veterans and others have engaged in a conspiracy and scheme to defraud," the affidavit said.
The arrests began Monday as search warrant signed by an Oklahoma federal judge was executed.
The search warrant indicates that investigators are looking into how much money Allied Veterans donates to charity and whether that money was the proceeds of a gambling enterprise. The document says the organization claims it gave 70 percent of $290 million in revenue over the last five years to charity, but investigators can only document $6 million -- or 2 percent -- were given to qualified nonprofit organizations.
The warrant also says that machines used in the Internet cafes are not games of chance, but slot machines, which are illegal outside of licensed casinos.
To play games at one of the Internet cafes, a customer gets a prepaid card and then goes to a computer to play "sweepstakes." The games, with spinning wheels similar to slot machines, have names such as "Captain Cash," ''Lucky Shamrocks" and "Money Bunny," according to the IRS.
Winners go back to a cashier with their cards and cash out.
The games of chance have been the subject of much debate in Florida and some are legal as long as most of the profits are donated to charity.
Copyright 2013 by News4Jax.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.