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Lt. Gov. Jennifer Carroll resigns over links to Allied Veterans

Florida Lt. Gov. Jennifer Carroll resigned Tuesday in the wake of federal investigation into a chain of internet cafes that she once represented, Gov. Rick Scott's office announced on Wednesday.

Carroll was interviewed early Tuesday by the Florida Department of Law Enforcement, which is assisting in a national probe of Allied Veterans of the World, a Florida-based nonprofit that operates a chain of internet cafes.

Search warrants were issued Monday in Oklahoma and Tuesday across Florida as a part of the federal probe. Fraternal Order of Police Jacksonville director Nelson Cuba was arrested, and others were detained in Semonole County in connection with the racqueteering investigation.  Download Search warrant

The investigation was conducted by the IRS, Secret Service, FDLE and sheriff’s offices in Jacksonville, Volusia County and Seminole County, where the probe began. Investigators said that Allied Veterans tried to scheme and defraud the public and governmental agencies by misrepresenting how much of its proceeds were donated to charities affiliated with Veterans Administration.

The investigation focuses on Allied Veterans' claim that it was a member of the Veterans Administration and that 70 percent to 100 percent of the profits were used for charitable purposes. Federal investigators allege that the centers are essentially gambling operations that front as charities, and gave only 2 percent of the $290 million earned between 2007 and 2012 to charitable operations. 

Search warrants were issued in 44 internet cafe locations in Florida from Duval to Monroe and Sarasota counties and as far north as Leon County. There were also warrants issued for several locations in Central Florida counties of Seminole, Volusia counties. Much of the probe began with investigators in the Seminole County sheriff's department sources said. 

However, authorities said, the centers are actually gambling operations, with charitable purposes getting just 2 percent of the $290 million earned from 2007 to January 2012. Charities are considered to be operating effectively when they spend at least 60 percent on programs.Carroll's public relations firm, 3 N. and J.C. Corporation, is currently inactive, according to the Florida Division of Corporations. Scott's office said in 2011 that Carroll had ended her affiliation with Allied Veterans.

Carroll was criticized in 2010 for introducing  legislation to legalize sweepstakes games like those in cafes operated by Allied Veterans. Then, as in now, Allied Veterans and other internet cafe operators took advantage of a loophole in state law that some say should be closed while other say internet cafes should be legal but regulated.

Carroll later withdrew the proposed law, saying it was filed erroneously and that she wasn't interested in legalizing internet cafes, the Florida Times-Union reported.

Carroll served in the House from 2003 to 2010, becoming the first African-American female Republican to be elected. Scott selected her as his running mate in September 2010 and they took office in January 2011.

 In the process, she became the first African-American elected statewide in Florida and the first female elected lieutenant governor.  

Investigators said the centers transferred money to Allied Management, a wholly owned subsidiary of Allied Veterans, and steered money to International Internet Technologies, and other companies affiliated with its owners. 

 Scott's chief of staff Adam Hollingsworth said Carroll resigned of her own volition and released the following statement:

“Individuals were arrested Monday for a racketeering and money laundering charges in connection with Allied Veterans of the Worlds illegal gambling companies. Lt. Gov. Jennifer Carroll consulted for Allied Veterans while serving as a member of the Florida House of Representatives in 2009 and 2010. She was interviewed by Florida Department of Law Enforcement officers Monday regarding her work with the company. Lt. Gov. Carroll resigned in an effort to keep her former affiliations with the company from distraction from the administration’s important work on behalf of Florida families. She made the right decision for the state and her family.”