Florida Lt. Governor resigns amid Internet gambling probe

Florida Lt. Gov. Jennifer Carroll announced her resignation Wednesday, a day after she was questioned by authorities investigating possible illegal gambling at an Internet cafe company that she once represented.

The head of the company, Allied Veterans of the World, has been accused of using the cafes as an illegal front for veterans' charity and keeping millions of dollars in profits.

Carroll's resignation letter to Gov. Rick Scott, dated Tuesday, offered no details about her reason for leaving. But Scott's chief of staff, Adam Hollingsworth, said she was interviewed by Florida Department of Law Enforcement officers Tuesday regarding her work with Allied Veterans of the World.

She resigned to ensure her ties to the company would not be a distraction for the administration, Hollingsworth said. Carroll, a Navy veteran, had owned a public relations firm that represented Allied Veterans, which operated Internet cafes and purchased software from International Internet Technologies.

According to an Internal Revenue Service affidavit filed in federal court, Allied Veterans evolved from a charitable organization that ran bingo games and held bake sales for veterans beginning in 1979 to a group suspected of operating more than 40 illegal for-profit gambling locations around Florida. The veterans charity was a fraud, according to the IRS.

"In an effort to mislead the public into believing that it is not profiting from an illegal gambling enterprise, Allied Veterans and others have engaged in a conspiracy and scheme to defraud," the affidavit said.

Carroll's aides said they had no immediate comment Wednesday.

To play games at one of the Internet cafes, a customer gets a prepaid card and then goes to a computer to play "sweepstakes." The games, with spinning wheels similar to slot machines, have names such as "Captain Cash," ''Lucky Shamrocks" and "Money Bunny," according to the IRS.

Winners go back to a cashier with their cards and cash out.

While serving as a state lawmaker, Carroll's ties to the company were also questioned when she proposed a bill that would benefit Internet cafes. But the bill was withdrawn before the 2010 Legislative session started. She told the "Florida Times-Union" at the time, that the bill was filed by a member of her staff without her approval.

The owner of the company accused of supplying the cafes with illegal gambling software was arrested Tuesday in Oklahoma. Chase Egan Burns, 37, faces charges of racketeering. He heads Anadarko, Okla.-based International Internet Technologies.

Burns is accused of making $290 million after supplying the software in Florida and claiming the games' proceeds would benefit Allied Veterans. Oklahoma authorities said the group actually received only 1 percent of the money. Burns and his wife, 38-year-old Kristin Burns, both face extradition to Florida to face the charges.

He and his wife were arrested after an investigation that spanned several years and involved the Internal Revenue Service and various law enforcement agencies in Oklahoma and Florida, including the sheriff's office in Florida's Seminole County and Oklahoma Attorney General Scott Pruitt's office.

Burns' wife's role in the company was not immediately clear.

Chase Burns was released from the Caddo County jail on a $500,000 bond. He denied any wrongdoing.

"What we do is legal," he told The Oklahoman on Monday.

His father, Tony Burns, also serves as his attorney. Tony Burns told the newspaper that his son broke no laws.

"What Chase was doing was he was actually selling the Internet time," Tony Burns said. "That's was what his business was — providing the software. And there's nothing illegal about providing software to any business."

Tony Burns did not return a call seeking comment from The Associated Press.

A telephone number listed for Allied Veterans in St. Augustine has been disconnected. Multiple emails sent by AP to an address listed on the group's website weren't returned.

Former Florida state Rep. Scott Plakon, a Republican, said he filed bills to shut down internet gaming sites in 2011 and 2012. He said he first found out about the storefronts when one opened next door to where he got his hair cut.

"I found that this is gambling, happening right next door to our Publix (grocery store) and dry cleaner and it just didn't seem right," he said.

The former lieutenant governor — who is the mother of Miami Dolphins defensive back Nolan Carroll — has been named in previous scandals.

Last year, a former aide, Carletha Cole, claimed to have found Carroll in a compromising position with a travel aide inside's Carroll's office.

Cole is charged with violating state law for allegedly giving a recording of a conversation with Carroll's chief of staff to a newspaper reporter.

Cole said she was ordered by the travel aide to find adjoining hotel rooms for Carroll when they traveled. Carroll has said previously the allegations are an attempt by Cole and her attorney to get the criminal charges against Cole dropped.

Carroll, a married mother of three, became the brunt of late-night talk show hosts when she defended herself against the allegations, telling a Tampa Bay area TV station that black women who look like her "don't engage in relationships like that." She later apologized for the remarks, which implied that black lesbians are not attractive.