Government may have linked attorney to illegal gambling operation

Friday, July 9, 1999 | 8:59 a.m.

Federal agents say in an affidavit that Tupelo attorney Jimmy Doug Shelton ran Vietnow Bingo, an illegal gambling operation.

Agents from the Internal Revenue Service and FBI also said unnamed witnesses reported they were recruited into the Vietnow organization by Shelton and others, but were never active.

However, their names apparently were used to obtain and keep a state charitable bingo license.

Shelton charged Thursday that federal agents are conducting a "vindictive investigation" of his bingo ties, because he once won a false arrest suit for a former bingo supervisor.

In a written statement Thursday, the Tupelo attorney denied that he or anyone else named in a federal probe of Vietnow Bingo operations had committed wrongdoing.

Shelton also charged that his estranged wife, Cheryl Shelton, and others had cut a deal with the Internal Revenue Service to share in any money and properties seized in connection with the case.

The affidavit was filed last week in federal court in Aberdeen in connection with a government attempt to keep $303,718 seized from a Vietnow bank account in December 1997.

In April, Vietnow attorney Jim Waide sued the government to recover the money. Waide claimed in the lawsuit that the seizure amounted to punishment of the victim of the alleged crime rather than the purported criminals. His suit also alleges the government's action tarnished Vietnow's name in the public's eyes, making it impossible for the group to continue its charitable bingo operations.

The government contends the money was used to further an illegal gambling operation at Vietnow directed by Shelton and involving his son, Jon Shelton, and at least three other co-conspirators.

The government contended Tupelo's Vietnow chapter was deliberately organized by Shelton as a front appearing to be an organization dedicated to helping Vietnam veterans.

Also named as co-conspirators in the skimming plot were Sue Carnathan and Lindon "Peewee" Baker, former supervisors of Vietnow Bingo operations.

Shelton's estranged wife, Cheryl Shelton, and her sister, Debbie Wheeler, and others have testified they participated with both Jimmy Doug Shelton, Jon Shelton and Sue Carnathan in falsifying bingo records to under-report true revenues.

However, despite almost two years of investigation and at least three presentations before a federal grant jury, no criminal charges have been filed in the case.

Shelton and his alleged co-conspirators all have previously denied the allegations.

The government's latest filing generally tracks allegations leveled in an affidavit filed in December 1997, when agents raided the homes of Jimmy Doug Shelton and Sue Carnathan and the bingo hall leased from Shelton for $10,500 a month.

The government in 1997 filed forfeiture actions against those properties.

The government charged that Jimmy Doug Shelton learned of the investigation the night before Thanksgiving 1997 and the conspirators immediately began trying to conceal evidence of their involvement.

Shelton and others - allegedly caught on video tape - removed all bingo cards from storage Thanksgiving morning, the agents said. The following day Shelton accessed a bank deposit box the government contended once held large sums of cash. In a raid five days later, "only a nominal amount of cash remained in the box," the affidavit said.

According to the government's statement, Vietnow Bingo took in almost $5.2 million from 1993 to 1997, with $337,800 going to Shelton in legal rental fees. Only $82,595 was listed for actual charitable contributions, the report said.