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Sunday, Mar 17, 2013 7:15 PM UTC

SC man among leaders arrested in FL gambling probe

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Topics: From the Wires,

BOILING SPRINGS, S.C. (AP) — Johnny Duncan knew how to work a room. Outgoing with a wide smile and a Southern drawl, he’d drape his arm around a stranger and ask for their backstory.

So it was no surprise that during a visit to Florida two decades ago, the former pool hustler from South Carolina walked into a bingo hall and started chatting with the owner.

Although the owner was nearly 25 years older, they quickly discovered they had a lot in common. Both served in the military and wanted to help veterans. Eventually, they became part of Allied Veterans of the World, a Florida-based charity investigators said was a front for a $300 million gambling operation.

Duncan was among 50 people arrested in a handful of states last week, and authorities said he was a leader in the organization accused of running nearly 50 gambling parlors offering computer slot machine-style games.

The group’s executives gave precious little to veterans and lavished millions on themselves, spending it on boats, real estate and Maseratis, Ferraris and Porsches, investigators said.

The scandal led to the resignation of Florida Lt. Gov. Jennifer Carroll, a Republican who once co-owned a public relations firm that worked for Allied Veterans. She has not been charged with any wrongdoing.

Duncan, 65, was in jail Sunday. His attorney, Kelly Mathis, has been identified by authorities as the ringleader, but Duncan also played a crucial role, authorities said, and he had a history of running a similar scheme. Duncan pleaded no contest more than 20 years ago to creating a fake charity to sponsor bingo games.

His latest arrest shocked his family, who insisted he was innocent.

“He helped a lot of veterans,” said his brother Donnie Duncan.

Family members blamed Mathis for Duncan’s legal problems.

“His lawyer told him it was legal. If your lawyer tells you something is legal, you believe him,” Donnie Duncan said.

Mathis, through his attorney, has also insisted that Mathis did nothing wrong and the games were legal sweepstakes, much like contests sponsored by fast-food restaurants or retailers.

Duncan’s family was worried about his health. He had a liver transplant in 2011 and his family said he needed his medicine.

“Right now, I’m terrified that he’s not going to get the care he needs,” said Duncan’s daughter-in-law, Dana Duncan.

Spartanburg County sheriff’s office spokesman Lt. Tony Ivey said Duncan, who is being held without bond, was being given his medicine.

In interviews with The Associated Press, friends and family members described Duncan as a man who grew up in a working class family in Boiling Springs, a rural area at the base of the Blue Ridge Mountains.

They said he was outgoing, generous and fiercely loyal to his family — he bought them homes and helped support them financially for years.

And they said the key to his success in the tough, smoky world of bars, bingo halls and gambling parlors was his personality. He could walk into a room and make everyone feel comfortable. People trusted him.

It was like that from his early days in Boiling Springs, where he hung around pool halls. After graduating high school, Duncan spent four years in the U.S. Navy.

When Duncan returned home in the early 1970s, he got into the bar business — and bingo. In the 1980s, he had a bingo operation in Florida. He knew the area well because he had spent time in Jacksonville while he was in the service.

But Duncan ran into some problems. He was arrested in Florida on gambling charges in 1987. He was charged with keeping a gambling house, sponsoring unlawful bingo games and failing to follow guidelines for games of chance in Leon County, Fla.

Duncan pleaded no contest to setting up a fake charity, called Army Navy Union, to sponsor bingo games. He was sentenced to six months of probation and ordered not to operate bingo games in Florida.

By 1989, Duncan was running South Carolina’s largest bingo network, with 28 games. He was described as the commander of Army Navy Union, which sponsored the games. He also reportedly obtained national charters and state permits that allowed bingo games to operate as charitable activities, free from taxes.

In the early 1990s, Duncan was spending more and more time in Florida. He met Harold Grossman, who was running a bingo hall in Fort Walton Beach, Fla.

Grossman, a World War II veteran, was in his late 60s and active in veterans’ organizations. They hit it off and soon were in business together.

But it was clear: Duncan was in charge and Grossman mostly stayed in the background.

Duncan began opening new bingo halls and bringing in family members to help, including Dana Duncan, who was married to his son.

She recalled Grossman doting on her family, and when he was diagnosed with cancer in 2004, he moved in with Dana’s family. He passed away later that year.

A couple of years later, Allied Veterans started opening up storefronts across Florida, advertising themselves as Internet cafes. The unregulated shops spread rapidly, becoming big business. Duncan was the former national commander for the group, authorities said.

Customers could buy Internet time on a card and check email on any number of computers, but most would play the slot machine-style games. They were encouraged to spend more to win more.

Dana’s father, Robert Gillespie, recalled that he first met Duncan in a pool hall in Greer, S.C. in the 1960s. He said the things that made Duncan a good pool player carried over into his life and his businesses.

“You didn’t want to play him because you knew you’d lose and he’d take your money,” Gillespie said.

More By Mitch Weiss.

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