JACKSONVILLE, Fla. – Jacksonville attorney Kelly Mathis, who was convicted on 103 charges stemming from an investigation into dozens of internet cafes around the state, had his convictions thrown out by an appeals court, which ordered a new trial.
Mathis, who was the only person to go to trial in the Allied Veterans of the World scandal and was convicted of racketeering and other charges, appeared before a three-judge appeals panel in September.
Allied Veterans of the World operated dozens of internet cafes that were raided and shut down in 2013 because of illegal gambling. Mathis had given legal advice to the Allied Veterans group, assuring the members that the activities were legal.
Investigators said the group, formed as a nonprofit, was a money-making scheme that used internet cafes and gambling to make hundreds of millions of dollars.
In an 11-page ruling Friday, a panel of the 5th District Court of Appeal said Mathis, a former president of the Jacksonville Bar Association, "dealt with Allied Veterans solely in the scope of an attorney-client relationship" and said a circuit judge improperly barred Mathis from presenting evidence that could have showed he was doing legitimate legal work -- rather than aiding an illegal operation.
"Appellant (Mathis) neither invested in nor received profits from the business," said the ruling, written by appeals court Judge F. Rand Wallis and joined by Judges Richard Orfinger and James Edwards. "The only financial benefit appellant received from Allied Veterans came from attorney's fees incurred in the course of representing the organization. When Allied Veterans expressed interest in expanding the cafes, appellant undertook additional legal research on the proposed location to ensure compliance with zoning ordinances and other local laws, which included speaking with various local authorities --- such as police chiefs and assistant state attorneys. Prior to expansion, appellant presented Allied Veterans with a report recommending whether it could feasibly open an affiliate in the proposed location."
Internet cafes, which critics derided as "storefront casinos," offered electronic games that authorities said were akin to slot machines. The 2013 crackdown led to lawmakers effectively shutting down the industry and helped spur the resignation of Lt. Gov. Jennifer Carroll, who previously had done consulting work for Allied Veterans of the World.
Prosecutors had successfully argued before a Seminole County jury that the internet cafes were mini-casinos, and that gambling is illegal in the state of Florida. But Mathis said he had spent years researching these kinds of businesses and insisted they were not illegal at the time. He said they were no different than a sweepstakes.
He used Willy Wonka bars as an example, where you buy candy bars for a chance to win a prize.
During Mathis' trial, prosecutors alleged that he "knowingly provided false legal advice" about the internet cafes, according to Friday's ruling. A jury found Mathis guilty of one count of racketeering, 51 counts of conducting an illegal lottery and 51 counts of possessing an illegal slot machine.
Mathis, who was sentenced to six years in prison but was allowed to remain free pending his appeal, insisted jurors would have agreed with him, but they never heard all the evidence in the case.
"The issues were pretty clear-cut, and it really was a fun case to work on and a case that we believed in from the get-go," Mathis' lawyer, Michael Ufferman, said.
Mathis' new lawyers argued in September that the trial judge erred by preventing Mathis from calling witnesses for his defense who would have told the jury what Allied Veterans was doing was not against Florida law.
"Kelly Mathis did as any lawyer would do in this case. He had clients that came and asked, 'Is this legal?' He researched it and he determined that Florida does have a valid game promotion statute similar to the McDonald's Monopoly game," Ufferman said. "If you buy French fries, you get entered into this type of contest. He relied on that. He gave that information, and I don't believe he should be found guilty for giving that information in good faith.
"I am confident if the jury is able to hear all the evidence, the jury would acquit Mr. Mathis."
The appeals court agreed that Circuit Judge Kenneth Lester improperly prevented Mathis from presenting evidence about issues such as local-government ordinances that regulated and allowed internet cafes. The ruling said, for example, that Mathis should have been allowed to "offer evidence negating his intent to commit racketeering."
"The state's persistent trial theme involved repeatedly arguing that appellant knowingly assisted Allied Veterans in operating an illegal sweepstakes," the ruling said. "Yet, the testimony established that appellant diligently researched the legal issues before concluding that Florida law did not prohibit internet cafes."
Ufferman said he's relieved the convictions were overturned and said the decision was a long time coming.
“I’m really just happy for Kelly,” he said. “When I got the news this morning, the first thing I did was pick up the phone and call him, and he was just extremely grateful that the appellate court agreed with the argument and is going to give him a chance to present his evidence to a jury, so a jury can hear the complete story. "
Of the 57 people who were arrested during the raid on nearly 50 Allied Veterans of the World locations in 2013, Mathis was the only one sentenced to any jail time. Allied Veterans co-founder Jerry Bass accepted a plea deal. So did Nelson Cuba, then president of the Fraternal Order of Police, along with FOP vice president Robbie Freitas.
Cuba was ordered to serve one year under house arrest.
Mathis was suspended from the bar after his conviction. A new trial date has not been set yet.
Prosecutors with the Attorney General’s Office have the option to retry Mathis or drop the charges against him.
A spokesman with the Attorney General's Office said the Office of Statewide Prosecution is reviewing the ruling to determine its next course of action.
News4Jax tried to contact Mathis on Friday, but he has not returned requests for comment.
The News Service of Florida contributed to this report.