Scott Pruitt (left) and Johnny Duncan. (Spartanburg Co. Detention Center)
BOILING SPRINGS, SC (FOX Carolina) -
The State Law Enforcement Division said that two Upstate men are in the middle of a $300 million multi-state gambling scheme.
It all started with an investigation into a veterans' charity based in Florida, and it's led to the arrest of nearly 60 people.
Two of them, Johnny Duncan and Scott Pruitt, are from Boiling Springs. They were arrested Tuesday and were being held at the Spartanburg County Detention Center.
Florida investigators said Duncan was the former commander of the Allied Veterans of the World, and he's listed as one of the four top conspirators charged with conspiracy, money laundering, having slot machines, lottery and keeping gambling houses.
Investigators said Pruitt was arrested on conspiracy and money-laundering charges.
Seven others from South Carolina were also charged in connection with the bust.
Investigators said a group called Allied Veterans of the World, based out of Florida, collected donations for years and funneled all of that to themselves.
The Seminole County Sheriff's Office in central Florida investigated the group for four years, which is a reported 501-C-19 non profit.
Investigators said they discovered more than a hundred for-profit companies and Internet cafes used to hide illegal gambling activity and close to $300 million in profits.
"Their gambling centers were purportedly operated for charitable purposes, but our investigation (reveals) that the premise of charity is a lie, a lie to citizens and a lie to our veterans," said Gerald Bailey, the commissioner of the Florida Dept. of Law Enforcement.
This week, law enforcement raided 49 Internet cafes where the alleged gambling took place.
The website for Allied Veterans of the World claims the charity gave time, money and support to veterans since 1979. The deputies' investigation found that from 2008 until 2012, less than 2 percent of their proceeds went to any charity.
"In every lawsuit… whenever they came to the part you had to disclose the entire operation's financial disclosure, they voluntarily dismissed the case. They never wanted anyone in government, anyone in the public or any veteran to see really what was behind the curtain," Seminole County Sheriff Don Eslinger said.
Scandals like this disgust the commander and the judge advocate at the Roebuck Veterans of Foreign Wars (VFW), post 9539.
Wednesday, their VFW club held a trivia fundraiser. Commander Bill Calderon and Judge Advocate Joe Moravcik said they hope people don't see all veterans nonprofits with a black mark because of incidents like this.
"The fact that we're out here honestly raising money for our veterans along with the American Legion Post and the DAV (Disabled American Veterans) and all the other organizations that are legitimate that do spend and care the time, and spend the money on our veterans. Something like this just, just turns my stomach," Moravcik said.
In Florida, computerized slot machine-style games are legal if the proceeds go to charity. Since most of the proceeds went directly to the conspirators, these were not.
Investigators said a lot of people were involved with the scandal, including the president and vice president of Jacksonville's Fraternal Order of Police.
She's not been accused of wrongdoing, but Florida's Lieutenant Gov. Jennifer Carroll resigned Tuesday. She used to work as a spokesperson for the organization.
Copyright 2013 FOX Carolina (Meredith Corporation). All rights reserved.
Tuesday, June 18 2013 9:47 AM EDT2013-06-18 13:47:39 GMT
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