Much of the impetus for the new ban on Ohio internet cafés was the perception that these cafes are vehicles for unregulated money laundering and other illegal activities. It remains to be seen how recent indictments against several Ohio internet cafés play out in court, but a high-profile case in Florida provides a text-book example of a corrupt enterprise.
Allied Veterans of the World registered as a tax-exempt charity to help veterans before setting up 49 Internet sweepstakes cafes across Florida. In fact, Allied Veterans was a complex money laundering scheme. Less than two percent of the multi-million dollar profits ever went to charity.
A joint state and federal investigation, “Reveal the Deal,” resulted in 57 arrest warrants and the seizure of slot machines, bank accounts and property. The four main co-conspirators are believed to have made more than $90 million, while the remaining 53 defendants hid $194 million in assets.
Defendants in this case are facing numerous first-degree felony charges under the Racketeer and Influenced Corrupt Organizations (RICO). Prosecutors are confident that they can show a clear conspiracy to establish a false non-profit and a sophisticated money-laundering network. Posing as a charity for veterans was a particularly cynical ploy.
This high-profile case in Florida gives ammunition to those who want to close down Internet sweepstakes cafes in other states. Local officials in Ohio districts where these enterprises have provided jobs and much needed revenue through equipment rental fees want the cafes to stay, especially if the industry was regulated to prevent illegitimate gambling. Legislation that would have provided for such oversight did not pass and the cafés in Ohio are expected to close their doors entirely.
Posted in Federal Crimes, White Collar Crimes