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60 charged in veterans charity scam; Fla. lieutenant governor out

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By The Associated Press
Wednesday, March 13, 2013, 7:18 p.m.
 

ORLANDO — Florida's lieutenant governor resigned on Wednesday, and nearly 60 other people are charged in a scandal involving a purported veterans charity that was a front for a $300 million gambling operation, authorities said.

Allied Veterans of the World runs nearly 50 Internet parlors with computerized slot machine-styled games, which usually are legal in Florida if most of the proceeds go to charity.

The organization's executives, however, gave precious little to veterans but lavished millions on themselves — purchasing boats, beachfront condos and Maseratis, Ferraris and Porsches.

Florida Attorney General Pam Bondi called the alleged scam “callous” and “despicable,” and said it “insults every American who ever wore a military uniform.”

Lt. Gov. Jennifer Carroll was not among those charged but resigned a day after she was questioned by investigators.

Her public relations firm did work for St. Augustine-based Allied Veterans. Carroll — a Navy veteran who served in the Persian Gulf War — appeared in a TV ad in 2011 promoting the organization's work on behalf of veterans and their families.

Carroll's resignation letter didn't explain why she is stepping down, but Republican Gov. Rick Scott said she resigned so that her ties to the organization would not be a distraction for the administration.

The investigation involved 57 arrest warrants and 54 search warrants issued in Florida and in five other states — Pennsylvania, South Carolina, Georgia, Alabama and Nevada. As of mid-afternoon, 49 people had been arrested.

Authorities said they seized about 300 bank accounts containing $64.7 million, as well as sports cars and other property.

Bondi said that when charges are formally filed next week, they will include racketeering, conspiracy, money laundering and possession of slot machines.

Gerald Bailey, commissioner of Florida's Department of Law Enforcement, said the arrests are only the first wave of the investigation. The second wave will look at the “large sums” of money spent on lobbying and donations to political campaigns; he would not give details.

Allied Veterans was founded in 1979 and evolved from a charitable organization that ran bingo games and held bake sales for veterans to a group suspected of widespread illegal gambling throughout Florida, according to an Internal Revenue Service affidavit.

One of those arrested, Jacksonville lawyer Kelly Mathis, was identified by authorities as the mastermind of the scheme. He allegedly made about $6 million from the operation.

In Anadarko, Okla., the owner of International Internet Technologies, a company accused of supplying the cafes with software, was arrested along with his wife. Chase Egan Burns, 37, and Kristin Burns, 38, face charges including racketeering and conspiracy.

International Internet Technologies made $63 million from the Florida operation from 2007 to 2010, according to the IRS.

 

 
 


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