60 People Charged, Florida's Lieutenant Governor resigned $300 Million Gambling Operation

Charged in a scandal involving a purported veterans charity that authorities said Wednesday was a front for a $300 million gambling operation.

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

But investigators said the organization's executives gave precious little to veterans and lavished millions on themselves, spending it on 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. A Navy veteran who served in the Gulf War, Carroll also appeared in a TV ad in 2011 promoting the organization's work on behalf of veterans and their families.

Authorities refused to discuss any ties between the 53-year-old Republican and the investigation. Her aides had no comment.

Carroll's resignation letter did not explain why she was 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 five other states: South Carolina, Georgia, Alabama, Nevada and Pennsylvania. As of midafternoon, 49 people had been arrested. Allied Veterans' 49 parlors in Florida were raided and shut down.

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

"It is shameful that Allied Veterans of the World allegedly attempted to use the guise of charitable organization to help veterans in order to lend credibility to this $300 million gambling scheme," she said.

A telephone number listed for Allied Veterans was disconnected. Emails to an address on the group's website were not returned. The address Allied listed as its headquarters appeared abandoned, the long, gray cinder-block building bare inside.

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

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.

To play games at one of the Internet cafes, a customer gets a prepaid card and then goes to a computer. The games, with spinning wheels similar to slot machines, have names such as "Captain Cash," ''Lucky Shamrocks" and "Money Bunny." Winners go back to a cashier with their cards and cash out.

Each of the locations had rows of computers and a big sign that read: "This is not a gaming establishment." On the walls were photos of company executives making donations and letters of recognition from some of the charities that supposedly benefited.

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.

Carroll became embroiled in a short-lived scandal last year when a fired staffer claimed that she walked in on Carroll and a female aide in a compromising position. Carroll denied that.

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