57 charged in Florida gambling scandal
FILE - In this Jan. 11, 2012 file photo, Florida Lt. Gov. Jennifer Carroll speaks during Florida Space Center day in Tallahassee, Fla. Carroll abruptly resigned Wednesday, March 13, 2012 after authorities questioned her ties into internet cafes that authorities say are fronts for gambling. (AP Photo/Chris O'Meara, File)
Florida’s lieutenant governor resigned and nearly 60 other people were charged in a widening scandal of a purported veterans’ charity that authorities said yesterday was a $300 million front for illegal gambling.
Lt. Gov. Jennifer Carroll’s resignation came a day after she was questioned in the investigation. Her public relations firm did work for the St. Augustine-based charity Allied Veterans of the World, but she has not been accused of wrongdoing.
Authorities said the probe involved 57 arrest warrants and 54 search warrants issued at gambling operations in 23 Florida counties and five other states: South Carolina, Georgia, Alabama, Nevada and Pennsylvania.
Florida Attorney General Pam Bondi said charges, which will be formally filed next week, include racketeering, conspiracy, money laundering and possession of slot machines.
“It’s callous and it’s despicable,” Bondi said of the alleged scam, which she said “insults every American who ever wore a military uniform.”
Authorities refused to discuss any ties between Carroll, a 53-year-old Republican, and the investigation. Her aides had no immediate comment.
Carroll, a Navy veteran who served in the Gulf War, appeared in a TV ad in 2011 promoting the organization’s charitable work on behalf of veterans and their families.
Carroll’s resignation letter to Gov. Rick Scott offered no details about her reason for leaving, but the Republican governor said in a statement she resigned so her ties to the company would not be a distraction for the administration.
“I will not elaborate on the details of her resignation further, other than to say that she resigned and she made the right decision for the state and her family,” Scott said.
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 gambling locations across Florida, according to an Internal Revenue Service affidavit. 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.
One of those arrested, Jacksonville attorney Kelly Mathis is the alleged mastermind of the scheme, authorities said. Mathis allegedly made about $6 million alone from the gambling operation.
From 2007 to early 2012, investigators found evidence of over $6 million in what appear to be charitable donations by Allied Veterans. That amount, however, was only about 2 percent of the more than $290 million made from gambling operations during that time period. Instead of going to veterans, the vast majority of the money went to for-profit companies and the individuals who operated Allied Veterans and its so-called “affiliates.”
Authorities said they seized about 300 bank accounts containing $64.7 million and assets including such exotic vehicles as Maseratis, Porsches and Ferraris.
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 have been the subject of much debate in Florida and some are legal as long as most of the profits are donated to charity.