August 12, 2010
-
News: IRS Gains Momentum In Miccosukee Tribe Case
The Miccosukee Tribe from the West Miami-Dade Florida claimed sovereign immunity as defense in its fight with the IRS in a court battle for credit card records. The IRS requested the records from Morgan Stanley in an attempt to prove that the former tribal chairman, Billy Cypress, used tribal money to fund his personal gambling debt. U.S. District Judge Alan S. Gold denied the tribe's attempt to block an IRS summons for the credit card statements. According to the ruling, the records were generated by Morgan Stanley and therefore not protected by the tribe's status as a sovereign nation. Judge Gold did make a final ruling on the issue but rather ordered an adversary hearing if the two sides could not reach an agreement.
The battle surrounds suspected misuse of the tribe's credit cards which involves the ousted former chairman Cypress and other tribal leaders between 2003 and 2005. It is believed that Cypress and possibly other tribal leaders used millions of dollars in cash from the tribe's gambling operations for personal gambling and travel expenses at Las Vegas and other exclusive casino venues. According to the IRS documents, the money was used to pay the tribe's five credit card charges which they suspect contains charges from the gambling excursions. If so, it would be a clear case of misappropriation of the tribe's money for their personal use. It is also suspected that the cards were used to purchase high-end merchandise for personal use.
Court documents indicate that the IRS has in their possession a significant amount of evidence in support of allegations that Cypress illegally used the tribe's unreported income. His misuse of the tribe's credit cards is part of the investigation that is looking into this misappropriation of income which was subject to U.S. Federal income tax. According to court documents, in late 2005, the Miccosukee Tribe agreed to give the IRS financial records from bank accounts Citibank, Wachovia, American Express, BankAtlantic, and Smith Barney. In return, the IRS would withdraw their requests to the financial records of eight Miccosukee Tribe officials. Attorneys for the tribe are concerned that if the IRS gets its way, it could expose more members of the tribe to criminal charges. On the other hand, if other members did break the law, the IRS intends to expose them.