"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.