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Veterans charity accused of illegal gambling, money laundering

A St. Augustine-based group called Allied Veterans of the World, which owns several charitable gambling Internet cafes in Volusi and Flagler counties and around Florida, has been accused of distributing only around 2 percent of its proceeds to charity and using the rest to fund luxury lifestyles. Yesterday, eight Florid and federal law enforcement agencies raided and closed down seven of Allied Veterans' Internet cafes, along with similar operations in 23 Florida counties and five other states. Prosecutors plan to charge 57 people with white collar crimes ranging from illegal gambling to money laundering.

In a surprising secondary development, Florida Lieutenant Governor Jennifer Carroll has resigned. She apparently consulted for the group in the past and even appeared in a 2011 TV commercial for the group. Governor Scott says her resignation was intended to prevent distractions for the administration.

The raids were not focused exclusively on the Allied Veterans group. In fact, two Jacksonville law enforcement officers who serve as president and vice president of the Fraternal Order of Police lodge were among those arrested.

So was the Allied Veterans' attorney -- and the developer of the charitable gambling software they used. Locally, 10 people are now facing allegations of white collar crime. Reports say the 57 people who were rounded up will be charged variously with illegal gambling, money laundering, racketeering, running an illegal lottery and possession of slot machines.

No details of the allegations against most of the defendants were reported. Instead, law enforcement spokespeople focused only on four main suspects who allegedly earned approximately $90 million through the scheme. The fact that among those arrested were the Allied Veterans' attorney and software developer is extremely unusual, but no information was given about their alleged involvement.

Internet cafes such as these have long been unpopular with Florida's municipalities, some of which have tried to close them down or keep new ones from opening. One state senator has already sponsored a bill to put a statewide moratorium in place.

A spokesperson for the Florida Department of Law Enforcement says that the investigation leading to yesterday's raids has been going on since 2009, and the state plans to expand it to include other charitable gambling establishments across the state.

"They can come after the nonprofits all they want," said one Daytona Beach businessman who couldn't get a charitable gambling license because of a moratorium. "[T]hey can target them, but they're legal, until they do away with sweepstakes."

Considering local opposition to these operations, it remains to be seen whether the Allied Veterans or other groups have in fact committed any crime. It may be, as the local businessman speculated, that they are merely being targeted because they're unpopular. We will simply have to wait until the details are put before a jury.

Source: Daytona Beach News-Journal, "11 locals face charges in statewide sweep of Internet cafes," Andrew Gant and Lyda Longa, March 13, 2013

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