By Kathy Curran, WBZ-TV

BERKLEY (CBS) – Outside American Legion Post 121 in Berkley, the American flag and patriotism fly high, but what’s happening inside is completely illegal.

You walk in the door, put your money on the bar and the gambling gets underway.

And the man in charge is a former police officer.

The I-Team went undercover and saw the action first hand. It’s a game of chance called “pull tabs” and it’s played by patrons of the Legion post every day of the week.

Our hidden camera investigation clearly showed money being exchanged for $1 a play, with the bartender on duty dealing out the pull tab cards that have become big business at the little bar.

When the I-Team arrived later to ask questions, the president of American Legion Post 121, a former part-time Dighton cop named Stephen Thrasher, flat out denied anything improper was going on at the bar.

“What games?” Thrasher asked, even though pull tabs were in plain view only inches away from him and behind the bar.

Thrasher denied there was anything illegal going on.

“Everything we do here is for the benefit of the American Legion and our members,” he said, claiming the pull tab game was actually run for charity.

We asked him, if it’s for charity why isn’t it licensed with the State Lottery Commission? “For charity, for us,” Thrasher said.

Ted Mahony, who heads the enforcement division for the state Alcoholic Beverages Control Commission, said his investigators find illegal pull tab games at clubs and bars several times a year.

“They’ll usually get a 30 percent profit on them and sell them over the bar,” Mahony said. “They sell to customers just like any scratch type ticket and get paid off by the bar.”

State officials said illegal games like the pull tabs we found in Berkley cause two major problems. They prey on customers because the odds of winning are low, and they shortchange cities and towns of local aid revenue paid out by the state-run lottery each year.

In Berkley, any extra local aid would be welcomed. Town Hall has been condemned, the building is crumbling, and manpower in the fire and police departments are at an all-time low.

When the I-Team found evidence of illegal gambling, we notified state investigators and lottery officials.

ABCC investigators showed up and hauled out cases of the illegal pull tabs from inside the Legion hall. They also found one box load stashed in the back of the Thrasher’s truck.

The I-Team discovered the club had been buying the pull tabs out of state, from Arrow International in Ohio.

“For a club that size, if they’re buying them in this volume they must be going through quite a bit of them,” said one ABCC investigator. “I’ve never pulled this many out of an American Legion Hall.”

The state commander of the American Legion said the organization expects the posts to comply with all state laws and regulations.

He said the Legion’s executive committee will investigate and could suspend or revoke Post 121’s charter.

Meanwhile, the Berkley post will also face a hearing before the ABCC on the illegal gambling as well as other licensing issues.

Post 121 could be fined or have its liquor license suspended or revoked.

Last year the town of Berkley received $514,000 in local aid from the state lottery.