A Daytona Beach appellate court appeared open Tuesday morning to throwing out the conviction and sentence of a Jacksonville lawyer who was the only one sentenced to prison in the Allied Veterans of the World scandal.
Kelly Mathis, 53, was sentenced to six years in the 2013 “internet cafe” raids that prompted several arrests, but Circuit Judge Kenneth Lester allowed him to remain out on bond while appealing the conviction.
Prosecutors said all the defendants were involved with a $300 million gambling ring set up to look like a veterans charity.
Authorities said the St. Augustine-based organization operated dozens of gaming centers throughout Florida, pocketed hundreds of millions of dollars and engaged in illegal gambling. The arrests prompted the Legislature to ban the storefront centers and resulted in the resignation of Lt. Gov. Jennifer Carroll, who had ties to Allied but was never charged.
After deliberating for a little more than two days, a Sanford jury convicted Mathis of racketeering, helping run a lottery and possession of an illegal slot machine or device in October 2013.
Tuesday the matter reached a three-judge panel with the 5th District Court of Appeal. The judges appeared very interested in Mathis’ contention that his trial was unfair because Lester refused to allow Mathis to introduce evidence backing his opinion that the centers were legal and didn’t violate Florida law.
Defense attorneys originally planned to call multiple government officials, including lawyers for the city of Jacksonville, to support their contention that the gaming centers were legal, but Lester disallowed that.
Judge Thomas Sawaya said the law that determined whether something was gambling in Florida is confusing and the fact that so many communities believed what Allied was doing wasn’t gambling seemed like a valid defense because Mathis can only be convicted if he believed Allied was breaking the law.
“The state prosecuted this case under the theory that Mr. Mathis knew this was illegal,” said Michael Ufferman, Mathis’ attorney. “And then the judge didn’t allow him to put people on the stand who agreed this was legal.”
Mathis, who was the lawyer for Allied, said under Florida law Allied was offering sweepstakes, not gambling. While officials with the office of Attorney General Pam Bondi have argued that Mathis knew it was gambling and his opinions were part of a criminal conspiracy to cover up what was going on.
Mathis and his law firm were accused of pocketing $6 million in the five years they worked for Allied.
Florida law says sweepstakes are not considered gambling if they are used to bring someone into a business that sells a legitimate product. That’s how businesses such as McDonald’s are able to offer games of chance without being shut down for promoting gambling.
Mathis met with numerous other lawyers who represented law enforcement agencies, general counsels, state agencies and others, and the vast majority agreed that Allied was offering sweepstakes and not gambling, appeals documents said.
Allied operated centers out of about 50 strip malls throughout Florida. Customers bought internet time at computers that also featured sweepstakes games that simulated slot machines.
Prosecutors insisted that the internet time was not a legitimate product because everyone came to gamble. During the trial, prosecutors presented people who had purchased hundreds of hours of internet time they had never used because they really came to gamble.
Assistant Attorney General Diana Bock told the appellate judges Tuesday that police and prosecutors had documents from Mathis’ office expressing concern about that internet time that tried to figure out how to deal with it, and that showed that Mathis knew what was going on was illegal.
But Sawaya expressed skepticism at that.
“I agree that would be potentially damaging,” Sawaya said. “But wouldn’t that negate his argument, not justify keeping it [his argument that what Allied was doing was legal] out of the trial?”
Defense attorneys also argue that Lester erred in not dismissing a juror who said her husband was addicted to gambling, but judges told Ufferman they weren’t as interested in that issue.
Everyone else arrested in the case had their charges dismissed or cut deals that did not involve prison, including former Jacksonville Fraternal Order of Police President Nelson Cuba.
Mathis’ license to practice law is suspended, and he faces possible disbarment if his conviction holds up. He is a former Jacksonville Bar president.
There is no deadline for when the appellate court might rule, but a decision will likely occur sometime in the next few months.