Seminole tribe accused of violating federal laws

By Jay Weaver
Miami, Florida (AP) June 2010

The Seminole Tribe – whose former leadership admitted to controversial spending sprees nearly a decade ago – is being accused of violating federal Indian gaming laws for spending hundreds of thousands of dollars on jewelry, cars, travel and other personal expenses for its members.

The National Indian Gaming Commission said during early June that the Hollywood-based tribe, which rakes in hundreds of millions from its popular Hard Rock Hotel and Casinos near Hollywood and Tampa, broke the law when it gave six members more than their allowable share of gambling profits.

The Seminole Tribe faces fines of $25,000 for each violation and the potential closing of its gambling enterprises, which also include operations in Coconut Creek and Immokalee. The tribe has 30 days to appeal the commission’s action.

Tribal spokesman Gary Bitner said in a statement: “The Seminole Tribe is reviewing the notice of violation and is intent on correcting their violations.”

Indian tribes are sovereign nations with the right to self-government. But they are also subject to federal laws and regulations and must follow the Indian Gaming Regulatory Act when spending gambling profits. The act specifies that revenue must be spent on tribal or local government operations and programs, economic development, charitable contributions and the general welfare of tribal members.

The law also allows them to distribute gambling profits to individual members, which the Seminoles have pledged in a federally approved plan to hand out in “equal shares.”

But the Gaming Commission, which enforces the act, found six violations that indicated tribe money was spent on personal expenses for certain members:

– Seminole Tribal Council member Max B. Osceola Jr. charged more than $85,000 in “personal expenses” on his tribe-issued American Express credit card in 2006. Most of his charges were for jewelry bought at the Platinum Jewelry Exchange in Hollywood, along with purchases of a Harley Davidson motorcycle, Sound Advice stereo equipment and home-security services.

The commission said the tribe was “unable to produce any documentation justifying the purchases as business expenses” and that Osceola acknowledged the AMEX charges were for “personal expenses.”


– In February 2007, the Seminoles’ Immokalee liaison, Rafael Sanchez, submitted a $55,074 purchase order for a GMC Yukon Denali to Tribal Council Representative David Cypress, who approved the requisition. A check was issued to Pines Pontiac GMC Buick for the SUV.

But the Seminole Tribe then sold the vehicle to Sanchez for $10.

“The sale of the car to Mr. Sanchez at a substantially reduced rate was a fictitious transaction to conceal the purchase of the car for Mr. Sanchez,” according to the commission.

– In June and August 2007, the Seminoles issued checks for $19,800 and $15,000 to two members for housing-related expenses that were not permissible, according to the commission.

– In June 2007, the Seminoles issued a check for $10,000 to Francine Marie Osceola to pay for a “Christmas gathering” that took place in Big Cypress in December 2006 – an impermissible expense, the commission said.

– In August 2007, the Seminoles paid $5,000 to Marty Johns for him and other tribal members to lease a property for “hunting and other recreational activities.” But the tribe did not produce a copy of the lease or any other evidence that the money was used for that purpose, according to the commission.

The Indian Gaming Commission’s crackdown requires the tribe to review its governing council’s credit card records from 2005 to the present and determine whether charges were for business or personal use.

The commission also ordered the Seminoles to submit a report within 60 days detailing their findings, and to show that every named tribe member has repaid personal expenses.

The Seminole Tribe, once a poor community of Indians mainly living in the Everglades, has seen its fortunes in the gambling industry soar with increasingly sophisticated casino, hotel and shopping venues.

Scandal surrounded the Seminoles in June 2002 when a federal grand jury indicted three former tribal officials on charges of embezzling $2.7 million and funneling the cash to an offshore Internet gambling site allegedly set up by then-Chief James E. Billie.

At trial, witnesses testified that tribe leaders acquired luxury cars, rented limousines, chartered jets and rang up tens of thousands of dollars in charge-card bills.

But in December 2002, a federal judge threw out all the charges against the three defendants after Billie testified they were following his orders to set up the Internet gambling site in Nicaragua. The tribe soon ousted Billie, who also had been a target of the FBI probe.

Florida’s Indian gaming revenues reached $1.9 billion in 2008, according to Casino City’s Indian Gaming Industry Report by Alan Meister, an Irvine, Calif. economist.

The Seminoles’ Las Vegas-style slot machines and other games account for much of that revenue, with the Miccosukees’ gambling operation in Miami-Dade running a distant second.

The Indian Gaming Commission’s crackdown comes as the IRS has launched a separate investigation into former Miccosukee chairman Billy Cypress, for alleged income tax violations stemming from the tribe’s gambling operation.