Miami-Dade

Federal courts

Ex-Seminole leader sentenced to 1-1/2 years in prison for income tax offense

 

Former Seminole Tribe council member David Cypress, who owes millions of dollars in taxes to the federal government, was sentenced to 1-1/2 years in prison for understating his income.

 

David Cypress
David Cypress
Joe Amon / Sun Sentinel

jweaver@MiamiHerald.com

Former Seminole Tribe leader David Cypress, believed to be the first Native American ever convicted of a federal tax offense, must surrender next month to start a 1-1/2 year prison sentence for understating his income from the tribe’s $2 billion gambling operation, a federal judge ruled Thursday.

Cypress had sought probation along with four months of house arrest, after having agreed to pay about $5.5 million in overdue income taxes to the Internal Revenue Service for the years 2003 to 2009.

His sentencing hearing offered a rare peek into the Seminole Tribe and its Las Vegas-style gambling enterprise, featuring the Hard Rock Hotel & Casino in Broward County. The Cypress case also conjured comparisons to the IRS’s current income-tax crackdown on the Miccosukee Tribe in Miami-Dade County and its former chairman Billy Cypress, no relation.

David Cypress’ lawyer tried to convince the judge that the 61-year-old former tribal council member committed the crime because of “cultural” differences between the Broward-based Seminoles and the rest of America. Defense attorney Joel Hirschhorn said Cypress was a “simplistic man” who didn’t grasp he owed personal income taxes as the tribe underwent a “rags-to-riches” transformation, thanks to its gaming bonanza.

Hirschhorn also argued that Cypress, who apologized in a brief statement, was a victim of the U.S. government, which he said showcased his client as the “poster boy for tax compliance on the reservation, perhaps even in all Indian Country.”

But U.S. District Judge Kathleen Williams was not swayed, despite recognizing the “shameful episodes” of the nation’s mistreatment of Native Americans.

The judge cited evidence that showed Cypress collected $25 million in Seminole income through a “double-billing” invoice scheme. It involved voucher payments to tribal vendors that secretly ended up in Cypress’ pocket as “personal expenses.” Cypress, who represented the Big Cypress Reservation on the Seminole council from 1999 until his resignation in 2010, admitted the misconduct in his guilty plea agreement and factual statement signed in April.

“I find what Mr. Cypress pleaded to and agreed to in his proffer was uniquely and sadly American,” Williams declared. “He was cooking the books.”

The judge also noted that she could find no evidence of any Native American anywhere in the country being convicted of a tax offense.

Cypress’ prison sentence could have been much worse had federal prosecutors been able to prove he “willfully” committed the double-billing scheme for the entire seven-year period. He was only charged with and pleaded guilty to filing a false tax return in 2007, understating his income by $285,000.

Assistant U.S. Attorney Carolyn Bell, who urged the judge to give Cypress a two-year sentence, mocked the defendant’s argument that his cultural background prevented him from grasping U.S. tax laws. “This was a sophisticated individual,” Bell said. “He was a leader of the Seminole nation.”

Under federal law, the Seminole Tribe’s status as a sovereign nation means the entity itself is not subject to taxes. But once the tribe distributes profits from its gambling casino to members, they are individually responsible for reporting and paying taxes on their annual income tax returns, according to the IRS.

Read more Miami-Dade stories from the Miami Herald

  • Friends and Neighbors

    Charity pays for glasses for underprivileged kids

    The Heiken Children’s Vision Program provides free comprehensive eye examination and glasses when prescribed to low-income school children who fail their vision screening and have no insurance or other resources for eye care. The program was started in 1992, and since then, 75,000 children have received exams with 83 percent needing and receiving free eyeglasses.

  •  

High school senior, Nicole Muxo, received a surprise when Miami Heat guard Dwyane Wade arrived at her prom on Friday, May 17.

    A PROM NIGHT TO REMEMBER

    Dwyane Wade surprises Miami teen at prom

    Persistence paid off for an Archbishop Coleman Carroll senior. She asked (and asked) and ultimately received Dwyane Wade as her prom date.

  •  

Det. Eutimio Cepero stands before cameraman from A&E's popular "The First 48" show.

    REALITY TV

    Miami police parts ways with popular “First 48” cable show

    The popular television show has helped solve Miami homicides, but critics say the cameras can be a distraction to investigators and the show seems to focus more on African-American communities.

Miami Herald

Join the
Discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Miami Herald uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here.

Have a news tip? You can send it anonymously. Click here to send us your tip - or - consider joining the Public Insight Network and become a source for The Miami Herald and el Nuevo Herald.

Hide Comments

This affects comments on all stories.

Cancel OK

  • Videos

  • Quick Job Search

Enter Keyword(s) Enter City Select a State Select a Category