Florida's statewide prosecutor told a jury Thursday that a Jacksonville lawyer "gamed" the legal system by helping create a network of gambling centers throughout Florida, but the defense said Kelly Mathis did nothing more than provide legal advice.
Mathis has pleaded not guilty to more than 150 charges including possession of slot machines, keeping gambling houses and other charges.
Mathis built up the network of casinos by claiming they were businesses where customers could buy Internet time, when in reality most customers played slot machine games on computers and didn't use the Internet, said statewide prosecutor Nicholas Cox during opening statements in Mathis' criminal trial.
Very little of the $300 million that the Allied Veterans affiliates earned from the Internet cafes went to veterans even though they were being operated under the aegis of the veteran's group, Cox said.
"This is about Kelly Mathis gaming the system," Cox said. "He's a lawyer and he gamed the legal system."
Mathis is pleading not guilty to more than 150 charges, including possession of slot machines, keeping gambling houses and other charges. He claims he only gave legal advice and did nothing wrong. Mathis and other lawyers at his law firm reached the same conclusions as officials in the Department of Agriculture as to the legality of the Internet cafes, said his attorney Mitchell Stone.
"Everything they did is consistent with legal work," Stone told jurors during opening statements. "It doesn't make him anything other than a lawyer hired to do the job."
The arrest of Mathis and 56 other people in March prompted the Florida Legislature to ban the storefront Internet cafes and led to the resignation of former Lt. Gov. Jennifer Carroll, who had worked as a consultant for Allied Veterans. She has denied wrongdoing and wasn't charged.
The trial could last up to six weeks.
Several of Mathis' co-defendants have reached plea deals with prosecutors and will likely testify during Mathis' trial. They include Chase Burns, an Oklahoman who prosecutors say produced the gaming software for the computers in the Internet cafes, and two former commanders of Allied Veterans of the World, Jerry Bass and Johnny Duncan.
Cox told jurors how prosecutors believe Allied Veterans got involved with the Internet cafe business. Burns and his associates wanted to get into business in Florida and sought Mathis' advice about how to do it. Mathis told them they needed to sell a product - in this case Internet time since it was tax free - and also operate as a charity to avoid some state requirements. Through Mathis, Burns joined forces with Allied Veterans to set up the gambling affiliates, Cox said.
"Chase Burns isn't interested in being a charity. They're wanting to sell games," Cox said. "Now you have a charity coming in, courtesy of Mr. Mathis."
Mathis was an integral part of the organization, Cox said, controlling leases, contracts and even creating the form customers were required to sign when they went to the cafes saying they were purchasing Internet time, not gambling.
Mathis' attorney told jurors the Internet cafes had sweepstakes that were promoting the sale of Internet time, no different than McDonald's offering its customers scratch-off tickets, and that state lawmakers had legalized such games more than 40 years ago to promote business.
"They were trying to promote sales of Internet time," Stone said. "That's called a successful game promotion."
Furthermore, Burns and the Allied Veterans leaders offered Mathis a share of the business but he refused, saying he wanted only to be their lawyer not a business partner, Stone said.
Stone said the investigation into Allied Veterans was initiated by Seminole County Sheriff Don Eslinger after Stone challenged a Seminole County ordinance restricting the Internet cafes.
"This isn't gambling," Stone said. "He didn't break the law and he was not the mastermind."