Customers believed they were gambling in cafes
SANFORD – While a jury will have to determine if the games played in Internet cafes allowed customers to gamble, that question was clear to several witnesses on the opening day of Kelly Mathis' trial.
When Thomas Brennan of Apopka walked into an Allied Veterans Internet Cafe in January 2010, he said he immediately thought he was in a casino.
"These were clearly electronic slot machines," Brennan said. "In my personal opinion, it was a gambling facility."
Customers were required to sign a form that said they were buying prepared Internet access, which included free entries to play the "sweepstakes" games. Customers could also get 100 free entries a day by mailing in a request, according to the form.
Brennan was among the first witnesses called in the trial of Mathis, a Jacksonville attorney who was labeled the "mastermind" behind the $300 million Allied Veterans business that prosecutors say masqueraded itself as a group helping veterans' charities. Dozens of people were arrested in March on charges including illegal gambling and money-laundering.
Mathis' attorney, Mitch Stone, said his client only served as an attorney, offering advice to Allied Veterans on how to legally run the business.
Jeanette Hinkson, 78, said she signed the form, but didn't read it. She said she spent $55,000 to $65,000 at an Allied Veterans center in Kissimmee and thought it was gambling.
"Everybody signed a piece of paper but as I recall nobody read it," she said. "When you win, you're paid off in cash."
Don L. Tyler said he "gambled" at the Orange City gaming center regularly and once won $1,200.
He said he didn't go there to use the Internet.
He described a video in which Mathis appeared that played in the cafe, illuminating the good deeds that were done with proceeds from the business.
"It led me to believe that even if I do lose a little bit of money, it's going to a good organization," Tyler said.
The day began with opening arguments from the prosecution and defense.
"This was slot machines and this was an illegal lottery," statewide prosecutor Nick Cox said. "You're going to hear about the immense amount of money that came out of these Internet cafes in a short amount of time. They had to appear as though they were selling Internet time."
However, Stone said Mathis only advised his clients on how to run their operations legally. He said Mathis has been targeted by the state, which has made lenient deals with other figures in the case and to lay all the blame on Mathis, who faces dozens of counts of money laundering, illegal gambling and racketeering.
In the cafes, customers paid for Internet time but could also play computer games called Money Bunny, King's Crown, Shamrocks, Lucky Seven and Wheels of Riches for free.
"People might think that this is fun and this is like going to Vegas, but it's not," defense attorney Mitch Stone said.
The payoffs were predetermined and not a matter of chance, which was legal under state sweepstakes law, said Stone.
Stone said the payoffs operated similar to getting a winning sweepstakes number under the cap of a bottle of soda.
"If this isn't gambling the whole case falls, and this isn't gambling," he said.
Stone said Mathis was contacted in 2007 by an Oklahoma gaming executive who wanted to set up some sort of legal operation in Florida. Mathis was just an attorney for the operation not an owner, Stone said, though he earned $6 million to $7 million in legal fees.
"Mr. Mathis was running a law firm and did not have a piece of the action," Stone said.
Cox said the state plans to prosecute more than 40 other defendants after several of the main operators settled their charges without prison time and will be subpoenaed to testify in the Mathis trial. Mathis has rejected discussions of a plea agreement.
"Kelly Mathis is an integral part of starting the operation and continuing the enterprise," Cox said. "It's about Kelly Mathis gaming the system. This thing with Internet time is a subterfuge."
Stone said the state targeted Allied Veterans of the World's Internet cafes because it wants to seize the money that the operation has made and use it for law enforcement.
Under forfeiture laws, the state could claim the millions held by Allied if the company is found guilty. Investigators simply looked at bank records and did not determine whether gambling laws had been followed, Stone said.
"A guy went in (an Internet Cafe) for a few minutes and said, 'Looks like they're gambling. Charge with them with a crime and take their money,'" Stone said.
The trial is expected to last up to two months.