It was a scam that was the talk of Florida. And two cops, both leaders in their police union, played no small part in making it happen. This past January, Nelson Cuba, former president of the Jacksonville Fraternal Order of Police (FOP), pleaded guilty to three charges related to his transferring more than $500,000 from an illegal gambling enterprise to his own use. Ex-FOP Vice President Robbie Freitas had pleaded guilty last April. The convictions were part of a state probe into a gambling and money-laundering operation nominally run by a charity. Participants netted nearly $300 million until the ring was busted two years ago. Though not among the 57 arrested, Florida Lieutenant Governor Jennifer Carroll resigned, at Governor Rick Scott’s request, given the fact of her public relations work several years earlier on behalf of the charity.
The State of Florida allows slot machines in Seminole tribe-owned casinos and at dog and horse racing tracks in certain southern counties. This leaves a large niche for illegal slot operations. During the last decade, a group of investors in the northern part of the state decided they could make some serious, if illegal, money this way. Leading the group was a prominent Jacksonville attorney, Kelly Mathis, at one time the president of the local bar association. The challenge was finding a legitimate front. Mathis believed he had the answer in one of his clients, a St. Augustine-based nonprofit organization, Allied Veterans of the World. He did the complex paperwork that enabled the group to acquire a new mission: running gaming centers inside Internet cafes in Florida strip malls.
Allied Veterans of the World came to operate nearly 50 of these mini-casinos. Customers typically would buy Internet or phone time on a gift card, enabling them to check e-mail or surf the web on any number of computers, but then would play online sweepstakes games such as “Captain Cash” and “Lucky Shamrocks.” Mathis and his law firm made out well, allegedly pocketing an estimated $6 million during the five years they represented Allied Veterans. Organizations supposedly benefiting from donations from Allied didn’t make out very well, receiving only two percent of the slot machine revenues. Eventually, state prosecutors, in the midst of a broad investigation of gaming, took a close look at Allied-owned cafes. They concluded these were fronts for illegal slot machine playing. The house came crashing down in March 2013 when law enforcement agents arrested 57 persons for various activities related to gambling investment, operations and money-laundering. Most of the defendants pleaded guilty in return for no jail time. The bad publicity generated by the arrests prompted the Florida legislature in short order to ban Internet cafe gambling in the state. Governor Scott signed the bill, more symbolic than substantive, into law.
Kelly Mathis, unlike the other defendants, decided to take his chances with a trial jury. That was one gamble he came to regret. In October 2013, he was convicted on one count of racketeering, and on about 50 counts each of running an illegal lottery and possessing an illegal slot machine. In February 2014, he received a six-year prison sentence for racketeering, a five-year sentenced (concurrent) for the lottery charges, and time already served for the machine possession charges. Mathis has maintained his innocence from the start and currently is appealing the decision. The most prominent casualty in the scandal, however, was not indicted. That would be Florida Lieutenant Governor Jennifer Carroll. The Trinidad-born Carroll, who had taken office in January 2011, abruptly resigned on March 12, 2013 at the request of Governor Scott. Her public relations consulting work on behalf of Allied Veterans of the World years earlier, while as a member of the state legislature, represented a political liability to her boss.
Two of the more significant participants in the scheme were Nelson Cuba and Robbie Freitas, respectively, the former president and vice-president of the Jacksonville Fraternal Order of Police. Cuba and Freitas were authorized agents for various shell corporations whose sole purpose was to launder the proceeds of illegal slot operations. The pair also owned several Internet cafes. Freitas was authorized to sign transactions on behalf of one such company, Enzyme Consultants. Originally charged with 17 counts, including racketeering and money-laundering, he pleaded guilty to two charges in April 2014 in return for a promise of no prison sentence or fine.
Nelson Cuba was next. Court records show that Cuba had made a series of deposits totaling $576,100 during September 4, 2009-December 30, 2011, accompanied by a combined $571,400 in withdrawals. He withdrew the money every week or two in rounded amounts below $10,000. Originally indicted on more than 100 counts, he pleaded guilty on January 6 in Seminole County Court to possession of a slot machine, running a lottery, and setting up an illegal financial transaction. He then was sentenced to one year of house arrest and four years of probation, and was ordered to pay $115,000 in fines. Cuba also surrendered his law enforcement certification.
Almost all the defendants in the case took plea deals to avoid prison time. Among those pleading guilty were two former principals of Allied Veterans of the World, Jerry Bass and Johnny Duncan, plus Chase Burns, who designed the gaming software. There is a reasonable libertarian case to be made for legalizing rather than banning storefront gambling. But either way, police officers, whether as public employees or as union officials, should know better than to enrich themselves at the expense of military veterans.