JACKSONVILLE, Fla. -- In a breaking story you'll see here first, Action News has learned a federal gambling probe is centered on Jacksonville.
The leader of a local veterans non-profit organization is now in jail as part of a cross-country investigation involving the U.S. Secret Service, the IRS, JSO, FDLE, and the sheriff's offices in Seminole and Volusia counties.
Jerry Bass is the National Commander of Allied Veterans of the World Inc. and Affiliates. He was arrested and booked into the Duval County Jail this morning. His arrest is the result of a six-year long investigation that spans throughout Florida and other parts of the country. We are working to confirm other arrests and what charges all of the suspects face.
Fraternal Order of Police Union President Nelson Cuba
and his VP, Robbie Freitas, have also been arrested. Sources tell Action News police arrested Cuba and Freitas on Monday at a conference in Fort Lauderdale. The two were extradited to the Seminole County Jail. Kelly Mathis, an attorney for the Allied Veterans of the World Inc & Affiliates, was also arrested in Duval County and extradited to Seminole County.
In the 130-page search warrant, investigators claimed Allied Veterans raked in hundreds of millions of dollars from a fraud ring that used Internet Cafes as a front throughout Florida. The company claimed they were a non-profit who donated 70% of all of their proceeds back to the Veterans Administration. according to court documents. However, federal investigators found their donations were a far cry from that estimate. After seizing evidence in two states and pouring through more than 30 bank accounts, federal investigators found only 2% of all of the proceeds were charitably given to the VA, or about $6 million. Meanwhile, Allied Veterans of the World Inc and Affiliates is documented to have made $290 million from 2007 through early 2012; and that was after paying out gambling winnings to players, according to the court documents.
The search warrant we obtained was filed Monday with the US District Court for the Western District of Oklahoma. They say the investigation originated in Seminole County due to complaints from the public about gambling at the Internet Casinos.
IRS agents were looking to seize everything from computers, hard drives, to bank accounts, business records, and email correspondence. They started their investigation in 2007 when the Allied Veterans "affiliates" started claiming to provide electronic sweepstakes in connection with companies that allegedly purchased Internet Casinos. They searched 50 Allied Veterans Affiliates around the state, and one facility in Oklahoma that investigators consider to be the "target location."
The warrant says "Allied Veterans and others engaged in a conspiracy and scheme to defraud the public and governmental agencies into believing that the money spent, and lost, at the Internet Casinos that used the Allied Veterans name went to a charitable organization that was a member of the Veterans Administration."
In April 2012, documents we obtained show the Internet Casinos were "sold." However, the documents also say undercover agents went into these places and determined they were still operating with the same resources.
According to the warrant, International Internet Technologies, LLC in Oklahoma was also searched. This is where the computer programs for Allied Veterans are held. Duval County has the most locations connected to the fraud investigation. The documents show eight locations across Jacksonville, 1 in Clay, 1 in Columbia, 1 in St. Johns, 1 in Flagler, 2 in Nassau, and 1 in Putnam.