FDLE: Florida lawyer at center of $300M gambling scheme
Judge orders Kelly Mathis held on $1 million bond
The man who authorities say masterminded a scam to use a veterans charity as a front for an illegal gambling operation worth nearly $300 million was a well-known attorney who once ran a marathon in a suit as a publicity stunt.
Jacksonville attorney Kelly Mathis was identified Wednesday by authorities as the man at the center of the alleged racketeering scheme. Two other men charged as co-conspirators had experience running gaming parlors, including Johnny E. Duncan, who was charged more than 20 years ago with creating a fake charity to sponsor bingo gaming, which allowed the games to operate tax-free. The other man, Jerry Bass, had previously worked as general manager of a video poker parlor in South Carolina.
Authorities said Mathis made about $6 million from the operation. During a news conference Wednesday, Florida Attorney General Pam Bondi unveiled a poster with a photo of Mathis in the center and linked to dozens of alleged gambling operations. Officials said he was the registered agent for 112 businesses related to the investigation. Nearly 60 people have been arrested so far.
"Kelly Mathis ... appears to be the commonality of those who were arrested," Florida Department of Law Enforcement Commissioner Gerald Bailey said.
A lawyer for Mathis said during his bond hearing Thursday that his client did nothing illegal. Mathis' bond was set at $1 million.
None of the defendants had the opportunity to argue for lower bond, which their defense attorneys described as violating their rights.
The organization under investigation — Allied Veterans of the World — ran more than 40 Internet parlors offering computer slot machine-style games, investigators said.
Authorities said the organization's executives gave precious little to veterans and lavished millions on themselves, spending it on boats, real estate and Maseratis, Ferraris and Porsches.
The scandal led to the resignation of Lt. Gov. Jennifer Carroll, a Republican who once co-owned a public relations firm that worked for Allied Veterans. She has not been charged with any wrongdoing.
Meanwhile, news reports of the investigation sent shock waves through the Jacksonville legal community, in large part because Mathis is a well-known lawyer.
Mathis, 49, is the past president of the Jacksonville Bar Association. He headed the group about six years ago, according to Ray Driver, the current president.
"It's unfortunate that a member of our profession is swept up in this," Driver said. "I've always thought that Kelly was a very nice guy. Very professional."
Unlike membership in the state Bar, which is mandatory for lawyers, the Jacksonville group is voluntary.
Driver said Mathis' presidency of the group did not overlap with his tenure as Allied Veterans' registered agent.
A security guard turned an Associated Press reporter away at the entrance to the Jacksonville gated community where Mathis lives, 1.5 miles from the exclusive Deerwood Country Club. The attorney's 7,890-square-foot home on Riding Club Road has five bedrooms and 4 1/2 baths. Duval County records showed Mathis bought it in September 2008 for $875,000.
A woman who answered the phone at Mathis' law firm said no one was available to talk about his arrest.
It's unclear exactly when Mathis became involved with Allied.
According to a 2004 profile of Mathis in the Daily Record, a business and law publication in Jacksonville, Mathis said he was known for once running a marathon in a suit as a stunt.
He grew up in Brooksville, a small town about an hour north of Tampa, majored in political science at Florida State and graduated from law school at Vanderbilt University.
Mathis worked at two large law firms, and in 2003 opened his own firm in Jacksonville. He described himself as competitive.
"Part of it is can you outwork and outsmart the other attorney," he told the Daily Record. "It's also ... like being a sherpa, guiding clients through an intricate process. But, most important, you want to prevail for a just cause. If you have a client that has a problem that needs a resolution, you want to give them a favorable resolution."
Duncan was the former national commander for Allied Veterans of the World. He was being held without bail at a county jail in Spartanburg, S.C.
Duncan's brother, Donnie Duncan, insisted his brother did not break any laws.
"He took legal advice from (his attorney) Kelly Mathis. Kelly took care of everything — all the applications for the Internet cafes. Everything was done legally," Donnie Duncan told The Associated Press on Thursday.
He said his brother served in the Navy during the 1960s and created Allied to help veterans.
Johnny Duncan was arrested on gambling charges in 1987. He was charged with keeping a gambling house, sponsoring unlawful bingo games and failing to follow guidelines for games of chance in Leon County, Fla.
The AP reported at the time that Duncan pleaded no contest to setting up a fake charity, called Army Navy Union, to sponsor bingo games in that county.
He was sentenced to six months of probation and ordered not to operate bingo games in Florida.
"There is no evidence that any of the money collected was used for a charitable purpose," according to court records.
By 1989, the AP reported, Duncan was running South Carolina's largest bingo network, with 28 games. He was described as the commander of Army Navy Union, which sponsored the games. He also reportedly obtained national charters and state permits that allowed bingo games to operate as charitable activities, free from taxes.
According to the Tampa Bay Times, which reported on the Internet cafes in 2011, Duncan and Jerry Bass met around 1995, when Bass was the general manager of Slots of Fun, a 110-machine video poker parlor in Fort Mill, S.C.
Bass was also arrested. No one returned a telephone call to his home.
A telephone number listed for Allied Veterans was disconnected.
Duncan lives in Boiling Springs, S.C., a hardscrabble rural community just north of Spartanburg, S.C. Mobile homes, mill houses and strip malls line the two-lane road leading into the community of 8,000. Duncan bought his two-story brick home with a swimming pool for $286,000 in 2007.
Two of the company's officials — Moses Ramos and Scott Pruitt — live within blocks of Duncan. Court documents showed Duncan the house Ramos's lives in for $180,000 in 2009.
Ramos' wife, Beth, said her husband had been arrested but didn't want to discuss details.
"This has been hard," she said, standing in the doorway of her home.
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