Following the money trail: Operation Reveal the Deal
A $300 million illegal gambling business was brought down in Florida Spring 2013. Allied Veterans of the World ran 50 different gaming rooms in strip malls across the state allegedly selling internet time. Prosecutors and law enforcement called it illegal gambling and arrested 57 people from six different states.
Only one of the 57 charged even went to trial - the rest cut deals with authorities and walked free, albeit usually with a felony on their record. But many, like 38-year-old suspect Chase Burns, who got back $81.5 million worth of seized bank accounts and items but gave up $10 million to the state.
While it's been four years since the initial raids and court dates, a question remains: what happened to the millions in assets seized by law enforcement?
Short answer: they aren't telling yet.
UPDATE: Sheriff records show how $17 million in gambling funds were spent
OPERATION REVEAL THE DEAL
Law enforcement investigations have code names. The three-year investigation that led to the arrest of 57 people and the resignation of the state's lieutenant governor at the time, was called Operation Reveal the Deal. In announcing the arrests and raids, law enforcement argued Allied Veterans of the World was a business masquerading as a charity for veterans.
They said they ran internet cafes and donated a percent of profits to charity; police said they ran online slot machines and only donated 2 percent of their profits to charity.
"The actual prosecution attempted to suggest that it was a charity, that people were being cheated,” said Curtis Fallgatter, defense attorney for Allied’s management group president. “It was never operated as a charity it was operated as a game room.”
After March 8, 2013, 50 storefronts with the words 'internet sweepstakes' in banners on the front were shut down. While just two were in Seminole County, Seminole County authorities shut them down statewide.
Many were arrested, most notably Burns, the software designer who converted personal computers to virtual slot machines, Nelson Cuba, the president of the Fraternal Order of Police in Jacksonville at the time (who later resigned), and Kelly Mathis, the group's attorney who's still fighting his criminal case.
Lt. Governor Jennifer Carroll would resign hours later due to her connections to the gambling ring; her public relations firm used to represent the company. At the time, Governor Rick Scott called her resignation a good decision but added he didn't think she committed any crimes.
Photos: Allied Veterans mugshots
Allied staffers maintain their 'illegal online gambling' ring was actually just an online sweepstakes in the same vein of McDonald's Monopoly game - with predetermined prizes and odds - and therefore legal.
Prosecutors argued Allied wasn't offering a legitimate product - instead only providing internet time to play the online slot games. Defense attorneys maintained the game was just a sweepstakes.
That didn't stop deputies and the state from seizing 442 items, including 313 bank accounts, 129 properties, six boats, three Porsches and a new Maserati.
KELLY MATHIS, STILL FIGHTING
"In hindsight, there were definitely some things I would do differently," statewide prosecutor Nick Cox told the Florida Times-Union in 2015. "But this was a very strong case, and the people at the top knew they were engaged in illegal gambling."
Cox is referring in part to Kelly Mathis, the organization's lawyer whose firm made a reported $6 million in legal fees over five years while Allied ran the sweepstakes business.
Mathis says his belief in his innocence has kept him going this long, fighting the charges against him and his convictions for the better part of the last four years.
Mathis was the head of the Jacksonville Bar Association before the Florida Supreme Court suspended his license to practice law.
A Seminole County jury found him guilty of racketeering, helping run a lottery and possession of an illegal slot machine or device. He was sentenced to six years in prison, serving four days before being allowed to stay out of jail while working on an appeal.
In October, the 5th District Court of Appeals threw out his jury, ruling the trial judge had not given Mathis the opportunity to put up an adequate defense during the trial. His attorney, Mitch Stone, has said they had a long list of witnesses who would have testified Mathis’ legal interpretation of the state gambling laws was correct.
Attorney General Pam Bondi's office petitioned the Florida Supreme Court, asking it to accept jurisdiction of the case. In a court order filed Wednesday, the Court decided to declined accepting the case, leaving Bondi with the option to re-try Mathis or drop the charges.
Mathis says he doesn’t regret not accepting a plea deal.
"I wanted to stand up for what was right. The cost of doing so was a lot more than I thought it would be," he says. "I've lost four years of salary and wages - it did in my marriage, it’s been very hard on [my] children."
Most of the remaining suspects of Operation Reveal the Deal cut deals with the prosecution in their criminal case and civil forfeiture case.
Defense attorney Fallgatter represented Johnny Duncan, president of Allied’s management group.
"It's kind of like the godfather," Falgatter explains. "They made us an offer we can't refuse."
Johnny Duncan, gave authorities a quarter of the $7 million in property and bank accounts that were seized by authorities. His wife and two sons were also arrested.
"They give him no contest, withhold [jail on] time served, and drop [the charges against] his wife and the two boys," Mathis says. "How do you say no to that if you're a loyal father and husband?"
THE MONEY TRAIL
First Coast News is still waiting to hear from the Seminole County Sheriff’s Office and the Florida Attorney General’s Office how the money seized in these cases was used. Authorities in Seminole County were the lead agency on the case, and everything seized was under their supervision at the time – however, some cases were transferred to the county where the items were located, including Duval and Volusia counties.
The Orlando Sentinel reported a week after the raids that Seminole County authorities took $100 million in bank accounts. According to multiple records, a large chunk of that money was returned to those charged in the case. Everyone charged was accused of racketeering, money laundering and operating gambling houses.
Each was able to avoid jail time by cutting a deal with law enforcement.
Authorities seized $583,507 in cash.
Notably, they took about $56,000 in cash and another $4,300 of Iraqi currency from Nelson Cuba, the former Jacksonville police union official.
To see exactly what was seized based on Seminole County court filings, you can view our full spreadsheet. The information on the list is public record, and has been edited for brevity and clarity. The headers at the tops of the columns explain what the column is and the information is put out in rows, organized by each suspect's name.
Suspects and Forfeitures Final 2-6-17 by Jacob Rodriguez on Scribd
LAW ON SEIZURES
Baughman, the First Coast News Crime Analyst, says there's a limit on the amount of money law enforcement can keep after seizures thanks to the Florida Contraband and Forfeiture Act.
The Act, last revised in July, allows law enforcement to seize items (bank account, car, home - in some cases liquid) suspected of being used to commit a crime or purchased with funds from criminal activity.
"There's nothing illegal about any of it," says First Coast News Crime Analyst and former law enforcement officer Mark Baughman. "It is beneficial to law enforcement agencies because it augments their budgets," he adds of the money the Seminole County Sheriff's Office seized.
He says the Florida Contraband Act limits how much money the police agency can keep.
"A percentage of those seized funds have to go toward drug awareness, drug education," he says. "The agencies all have different reasons for what they do with the money."
If a single law enforcement agency gets over $15,000, 25 percent of the funds must be donated for drug use prevention, drug abuse education, crime prevention, among other things.
But there are also things they aren't allowed to do. That includes using seized items to supplement or enhance items already in the agency's operating budget.