Jerry Bass, National Commander of Allied Veterans of the World Jacksonville leader, arrested
Bass tied to Vero Beach Internet cafe
Scripps Treasure Coast Newspapers
7:18 AM, Mar 13, 2013
12:08 PM, Mar 13, 2013
VERO BEACH, Fla. -- The leader of a Jacksonville veterans nonprofit organization tied to a Vero Beach Internet cafe is behind bars related to a cross-country investigation involving three federal agencies and the sheriff's offices in Seminole and Volusia counties, according to news reports.
Jerry Bass, the National Commander of Allied Veterans of the World Inc. and Affiliates, was arrested Tuesday and booked into the Duval County Jail, according to CBS affiliate WTEV 47 Action News Jacksonville. His arrest followed a six-year statewide investigation that spanned other parts of the country.
A 130-page search warrant filed in the U.S. District Court for the Western District of Oklahoma listed dozens of Florida Internet cafe to be searched, including the Vero Beach Internet Cafe at the Wave Business Center at 933 14th Lane in Vero Beach.
However, the Vero Beach business appeared closed Tuesday and it's unclear if IRS agents visited the location.
Reached Tuesday evening, IRS Special Agent Scott Schneider declined to discuss specifics of the search warrants served across the state, or whether they included the Wave Business Center on 14th Lane.
"We can't confirm or deny any activities at that Vero Beach location," said Schneider, the IRS criminal agent public information officer for the Tampa field office.
The Wave Business Center, in the Majestic Plaza, closed at 3 p.m. Tuesday and left a note on the door with this explanation:
"Attn. Customers. We are performing a system update and will be closed for at least 24 hours. We apologize for the inconvenience."
Other notices on the storefront said entrance was allowed for "18 years or older," and advertised "Print Copy Fax Surf the Web."
Managers of surrounding businesses in the plaza said they didn't see anything unusual Tuesday.
In March 2011, Scripps Treasure Coast Newspapers published reports about the Vero Beach Internet cafe, which cited drastically different figures involving Allied Veterans, in the two previous years from a $4,331 deficit reported to the Internal Revenue Service in 2009 to more than $1 million donated to veterans causes in fall 2010.
After seeing the report of the arrest Tuesday, No Casinos, a group that opposes the expansion of gambling in Florida, issued the following statement:
"The arrest of Internet café operators who masquerade as charitable veterans groups provides a loud and clear statement of the obvious — these are gambling operations that skirt the law just to open their doors. They should be shut down by law enforcement. To end any ambiguity that may remain, they should be banned by the Florida Legislature once and for all."
Meanwhile, the Oklahoman on Monday reported that one of Florida's largest operators of Internet cafes, Chase Burns of Florida Gaming Promotions and the International Internet Technologies, is under federal investigation for operating illegal gambling operations in Florida.
Federal investigators allege the owner of an Anadarko company is involved in an illegal gambling operation in Florida that made more than $290 million.
The owner, Chase Burns, 37, denied wrongdoing. "That's not true," he said Monday. "What we do is legal."
Burns appeared in Caddo County District Court Tuesday as a fugitive from Florida. He's charged in Florida with racketeering, conspiracy and multiple counts of the sale or possession of slot machines, conducting a lottery and keeping a gambling house.
Court records indicate bond was set at $500,000 for Burns. He's due back in court on April 12 for an extradition hearing.
His company, International Internet Technologies LLC, supplied gambling software to Internet casinos in Florida that posed as fundraising centers for veterans' charities, authorities allege.
The company, also known as IIT, has been paid more than $63 million for its computer work for the illegal gambling operation, authorities reported.
An Oklahoma City federal judge on Monday authorized a search of the IIT building in Anadarko for evidence of "conspiracy, mail fraud, wire fraud, operating an illegal gambling business and money laundering."
In an affidavit for the search warrant, an IRS agent reported the fundraising centers in Florida began operating in 2007 under the name of a nonprofit Corp., Allied Veterans of the World Inc. & Affiliates.
"In fact, the ‘fundraising centers' were nothing more than Internet casinos that operated slot machines in violation of Florida's gambling laws," IRS Special Agent Michael Favors wrote.
"Unlike some other Internet casinos," he noted, "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 Affairs."
The agent reported Allied Veterans represented that anywhere from 70 percent to all of its net proceeds from the centers went to charitable
causes, but actually only about 2 percent did.
"For the time period from 2007 to early 2012, investigators found evidence of over $6 million in what appear to be charitable donations by Allied Veterans.
"That amount, however, was only about 2 percent of the over $290 million in proceeds made from the gambling operations during that time period," the IRS agent reported.
"Instead of going to charity as is represented, the vast majority of the revenue earned from the gambling operation went to for-profit companies and the individuals who operated Allied Veterans and its ‘Affiliates.' To hide the true nature of its gambling operation from the public, Allied Veterans and others resorted to fraud and misrepresentations," the IRS agent reported.
The agent also reported that Allied Veterans claimed it sold its Internet casinos last April when it actually did not.
"With a few exceptions, the for-profit companies that allegedly purchased the Internet casinos are the same ones that were already operating them," the agent reported.
In addition to directing the operations of IIT, Chase Burns owned two of the Florida Internet casinos, federal authorities allege.
Staff writers Melissa Holsman and Henry Stephens, The Miami Herald and The Associated Press contributed to this report.