About 6 a.m. March 12, Jacksonville police arrived outside the Westside home of their comrade, Robbie Freitas.
They watched and waited, much like authorities had been doing for years.
Freitas, the first vice president of the Jacksonville Fraternal Order of Police, was “Target 2” in a sweep of suspects in the Allied Veterans of the World gambling/money laundering investigation.
“Target 1” was Nelson Cuba, who for 10 years as FOP president led the union with a mix of bravado and brashness.
Since 2010, police had been watching transactions involving the two — first in a Jacksonville Sheriff’s Office investigation, then as part of the larger Allied Veterans probe.
Investigators patiently tracked deposits and withdrawals on accounts linked to Cuba and Freitas. One shell company depositing money from illegal gambling operations into another shell company, authorities said, then regular cash withdrawals by Cuba and Freitas, the only signers on that second account.
Deposits totaling $576,100 from Sept. 4, 2009-Dec. 30, 2011, followed by $571,400 in withdrawals.
Sheriff John Rutherford would later talk about the patience necessary in establishing a pattern in a “structuring” case — where withdrawals were always under the $10,000 threshold that could trigger scrutiny from federal oversight agencies.
Then there was the Internet cafe affiliate, one of five partially operated by Cuba and Freitas, which made deposits totaling $464,295 into a Jacksonville FOP Foundation account at Bank of America. Cuba then wrote six checks totaling $420,000 that were deposited in a Jacksonville FOP Foundation account at BBVA Compass. Cuba was president of the FOP Foundation, as well.
Before arrests began that March morning, there was a series of briefings: the overview of the case, what to do with evidence at the scene and the reading of the deadly force policy.
At 8:15 a.m., officers knocked on Freitas’ door. A log from the arrest said Freitas was “upset and surprised,” but “very cooperative.” Officers took Freitas’ personal cellphone and his police pistol, sitting side-by-side on the coffee table.
Freitas made no statements and asked no questions, the log said. Ten minutes later, he was taken to the Florida Department of Law Enforcement office.
Within minutes, Cuba was arrested at a Fort Lauderdale hotel.
Both face an array of charges, including racketeering, money laundering, keeping gambling houses and illegally structuring monetary transactions.
Their cases are among the few that remain open in the investigation that dismantled a $300 million operation, netted 57 arrests, brought a six-year jail sentence for Jacksonville attorney Kelly Mathis and led to the resignation of former Lt. Gov. Jennifer Carroll.
The deal revealed
At a news conference the day after the arrests, Rutherford said the trail to what was deemed “Operation Reveal the Deal” began for his agency in 2007.
By September 2008, Cuba’s name was linked to what the sheriff called “potential illegal activity.”
By 2010, investigators determined Cuba wasn’t linked to the original investigation but instead was tied to a “second enterprise with multiple entities that appeared to be shell companies.” Some of those companies were linked to Allied Veterans.
At that point, Rutherford said he ordered a separate investigation into Cuba, Freitas, the FOP Foundation, Allied Veterans and its affiliates.
As Jacksonville investigators began to subpoena financial documents, they learned the U.S. Secret Service and two Florida sheriff’s offices were conducting similar investigations.
The agencies began working together, Rutherford said, and ultimately uncovered “a complex money laundering scheme” where Allied Veterans brought in $300 million but gave only 2 percent to charities.
Caught up in the arrests were Mathis, who was Allied’s attorney; Jerry Bass and Johnny Duncan, the current and former leaders of Allied; and Chase Burns, who created the software for the gaming machines.
But for Rutherford, it included two of his own officers. “Investigating a police officer is never a happy event for us,” he said. “But it is critical to our mission, to public safety and to public confidence in their police, that we ensure our officers obey the law.
“Nobody’s above the law. If we get evidence, we go after it. We always have,” he said. “And nobody, nobody gets a pass.”
Following the money
Cuba and Freitas were linked to five Allied Veterans affiliates — three in Duval County and two in Nassau.
The three Duval Internet cafes were operated by Seaside Internet LLC/Enyzme Consultants. The two in Nassau were run by Davis Internet Management.
In September 2009, Seaside began making weekly deposits into Enzyme’s bank account.
Within a couple of weeks, Cuba and Freitas began withdrawing money every one to two weeks. All in round amounts, all below $10,000.
The smallest withdrawal was $2,000, the largest $9,800 — “indicative of structuring,” officials said.
The two police officers were the only signers on the Enzyme account. Surveillance photographs from the bank showed the withdrawals were made by Cuba and/or Freitas, authorities said.
Investigators also found that on the same day of several of the cash withdrawals, a cash payment was made to a car loan in Freitas’ wife’s name, according to a timeline from the sheriff’s office. Those loan payments totaled $13,000.
Because Enyzme appeared to be a consulting company, investigators checked to see if Cuba and Freitas had filed required paperwork with the sheriff’s office indicating they had secondary employment as consultants.
No paperwork had been filed.
An exception to the norm
Most Allied affiliates split their proceeds the same way: 66 percent to the for-profit Allied corporation; 10 percent to Allied Veterans management; and 22 percent to the software company, leaving 2 percent for charitable donations.
Affiliate 46, located in Yulee, was an exception. Beginning in December 2008, the Internet cafe began making a weekly “payroll deposit” into the FOP Foundation Inc. account at Bank of America. Authorities said the deposit was 30 percent of the affiliate’s proceeds.
Records show Cuba opened the FOP Foundation Inc. account four months earlier and was listed as the only signer.
Six checks signed by Cuba were written to the BBVA Compass FOP Foundation account — three each in the amounts of $90,000 and $50,000. Checks were later written to several groups.
Where it stands
Cuba and Freitas are among the 13 defendants whose cases are still pending. An assistant statewide prosecutor said Friday there are still ongoing discussions with the two.
Freitas retired from the department. Cuba remains on leave without pay.
Most defendants have pleaded guilty and are serving no jail time.
The lone exception so far is Mathis, the attorney labeled the mastermind behind the gambling operation.
He was found guilty by a jury of 103 counts and was sentenced to six years by Judge Kenneth Lester. He remains free through his appeal.
At the news conference the day after the arrests, the FDLE commissioner said there would be more state and federal charges to come in the investigation.
No federal charges have yet been filed.
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