Looks like we may have yet another scam masquerading as a charity that “helps veterans”. And it appears this one was no small-time scam, either.
Florida-based Allied Veterans of the World was founded in 1979. It first ran “bingo games”. It’s since moved up to internet video gambling.
It claimed to be raising money primarily for charity. Indeed, in some states (like Florida), that’s the only reason their operation was legal. Some states allow what would otherwise be illegal gambling activities so long as more than half of the proceeds in fact go to charity.
Allied Veterans was quite successful. From 2007 to 2012, they apparently took in around $290 million.
The problem is, when authorities looked at their books they could only find about $6 million in charitable donations for the same period. That’s just over 2% of intake. Meanwhile, the guy heading Allied Veterans – a former president of the Jacksonville Bar Association – allegedly also received $6 million.
Authorities found nearly $65 million in various bank accounts; these accounts have been seized. And they also found that the organization’s execs seemed to be living the proverbial “Life of Riley” – complete with boats, beachfront condos, and high-end sports cars (Porsches, Ferraris, and Maseratis).
A total of 57 arrest and 54 search warrants were executed in six states in connection with the Allied Veterans investigation. Charges to be filed next week are expected to include racketeering, conspiracy, money laundering, and possession of slot machines. Additionally, the owner of what was apparently Allied Veterans’ partner – International Internet Technologies – and his spouse were also arrested and charged with racketeering and conspiracy. International Internet Technologies supplied the software used in the internet gambling scheme. According to IRS records they apparently made over $60 million dollars from the enterprise from 2007 to 2010.
Florida’s current Lieutenant Governor has resigned due to the scandal. It seems she’s appeared in at least one TV commercial (2011) lauding Allied Veterans and their work supporting vets. Prior to being elected, her PR firm also worked for Allied Veterans.
She resigned a day after being questioned in connection with the investigation. She is not facing criminal charges.
Investigation reportedly continues – focused on political donations and lobbying. There may well be a second act to this little drama.
Kudos to the State of Florida and their Attorney General’s office for putting these scammers out of business.