Lawsuit: Former Miccosukee chief stole millions from tribe
In a federal suit, the Miccosukee Tribe accused its former chairman and others of orchestrating a web of theft, embezzlement and fraud.
07/03/2012 5:00 AM
07/04/2012 5:24 PM
The Miccosukee Tribe has turned against its former chairman with a vengeance, accusing Billy Cypress in a new lawsuit of stealing $26 million from the tribe to spend on numerous gambling trips, shopping sprees, real-estate investments and luxury cars.
Cypress, who was voted out as chairman in late 2009, is accused of conspiring with two former Miccosukee financial officers, two former U.S. attorneys and a Miami brokerage firm to keep the tribe in the dark about his alleged “criminal enterprise.”
“Consequently, the Miccosukee Tribe and the Miccosukee people were unable to discover this massive web of financial theft, embezzlement and fraud until 2010,” the federal racketeering suit claims.
The West Miami-Dade tribe’s airing of its own dirty laundry, especially in light of a separate Internal Revenue Service civil probe of its in-house gambling distributions to Cypress and some 600 other Miccosukee members, is unprecedented.
The suit, filed in Miami federal court over the weekend, details a total of $11.5 million in ATM withdrawals by Cypress at casinos in Las Vegas and elsewhere, along with an additional $4 million in American Express charges for jewelry, restaurants and other expenses, between 2006 and 2009. Cypress also acquired nearly a dozen properties and residences, from Miami-Dade to Panama City Beach, worth a total of $4 million.
For decades, the Miccosukee Tribe has kept its own business to itself, asserting its sovereign authority in countless civil and criminal legal cases, from Everglades environmental disputes to DUI-manslaughter prosecutions. But the ouster of Cypress, who was replaced by Colley Billie during a severe recession, has led to an era of fierce political infighting among the Miccosukee leadership in the public arena.
In the suit, the Miccosukee Tribe has portrayed Cypress, who served as chairman from 1987 to 2009, as a serial “thief” provided “protection” by a coterie of exorbitantly paid professionals who never alerted other tribal members about his “misappropriations.”
Among the named defendants: Dexter Lehtinen and Guy Lewis, former U.S. attorneys in Miami, whose law firms were respectively paid $50 million and $10 million for a variety of tribal services; former senior Miccosukee financial officers Miguel Hernandez and Julio Martinez; and Morgan Stanley Smith Barney, the brokerage firm that held the tribe’s various financial accounts.
On Tuesday, some of the defendants countered that the new chairman and his supporters have gone to extraordinary lengths to malign Cypress to cover up their own incompetence.
“My involvement in this suit illustrates the rash irresponsibility of the Miccosukee Tribe in always blaming someone else for their problems, instead of themselves,” said Lehtinen, who represented the tribe from early 1992 until his firing in May 2010.
Lehtinen, husband of Republican congresswoman Ileana Ros-Lehtinen, has been sued not only in this racketeering case but also in an earlier Miccosukee suit alleging legal malpractice.
“I am not aware of what was paid for with tribal funds, whether for houses, credit card purchases, or otherwise,” he added.
“I was not supposed to be aware of such matters. Tribal members themselves would have had far greater access to tribal financial records.”
The tribe’s former chief financial officer, Martinez, who is accused of playing a key supporting role during Cypress’ tenure, echoed that view. He said the Miccosukee tribal council under Cypress’ leadership was fully aware of his spending, based on annual audits and regular meetings.
“We accounted for all of it,” said Martinez, who now works for the Grand Ronde Tribe in Oregon. “There was no complaint from any council members.”
The suit specifically accuses Martinez of having personal use of a tribe-issued American Express card approved by Cypress. Martinez, who worked for the Miccosukees for more than a decade, denied ever getting his own credit card, calling the allegation a “fabrication.”
“Everything that is said about me in this lawsuit is frivolous, baseless and reckless,” he said.
Cypress could not be reached for comment Tuesday.
The tribe’s suit targeting him is the latest of his legal woes. In 2010, the IRS claimed that he owed the government almost $2.8 million in taxes and penalties on $6.65 million in unreported income from 2003-05.
About half of that unreported income came from cash advances on tribe-issued credit cards, according to IRS records obtained by The Miami Herald. Cypress used tribal funds at hotels, casinos, restaurants, sports venues and on spending sprees, the agency records show.
The IRS says Cypress’ income totaled $10.7 million for the three-year period. The IRS’ civil probe of Cypress grew out of an investigation, started in 2005, into the tribe’s distribution of tens of millions of dollars in cash every year from its gambling operations to Cypress and other Miccosukee members — without anyone reporting the money as taxable income, according to federal court records.
Cypress’ personal lawyers, Lewis and Michael Tein, also a former federal prosecutor named in the latest suit, did not return emails and calls for comment.
The suit accuses the law partners of being paid more than $10 million for “legal work” doled out by Cypress between 2005 and 2009 that was “unsubstantiated, fictitious, exorbitant, excessive and fabricated.” Cypress “secretly approved the payment of an hourly fee” for Lewis and his law firm of more than $2,000 — plus authorizing expenses for luxurious travel, restaurants and other “personal benefits,” the suit says.
The suit alleges that Lewis had a “conflict of interest” because he was advising the Miccosukee Tribe of tax matters in the IRS case at the same time he was representing Cypress’ legal problems.
The tribe’s suit also accuses Lewis of failing to disclose that he resigned from his Justice Department post as head of the Executive Office for U.S. Attorneys in Washington, D.C., for alleged “travel malfeasance” — before he was hired by the Miccosukees in 2005.
One of the most lucrative Miccosukee cases for Lewis and Tein has been their representation of two tribe members who admitted fault in a 1998 Tamiami Trail auto accident that killed a Miami-Dade woman.
A jury awarded the woman’s family $3.2 million in 2009, but the defendants have not paid the judgment, saying they don’t have the money.
The Florida Bar says it is “monitoring” an allegation that Lewis and Tein lied when they swore in a court proceeding that their clients paid them $2 million to $3 million in legal fees. Last August, Tein testified during a sanctions hearing that the tribe itself was not paying for their clients’ defense.
Miami lawyer Ramon M. Rodriguez, who represents the family of the deceased woman, later produced 61 checks showing that the tribe paid $3.1 million to the Lewis Tein law firm. The lawyers now face another sanctions hearing on the perjury allegation later this year.
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