The IRS is investigating allegations that the Miccosukee Tribe used armored vehicles to deliver up to $10 million in cash from its gambling operations to hundreds of Indians four times a year — without anyone reporting the money as taxable income, according to federal court records.
The investigation into the West Miami-Dade tribe has generated a related IRS probe of its former chairman, Billy Cypress. He is suspected of charging at least $3 million on tribe credit cards for personal travel to casinos in Las Vegas, Foxwoods and other glitzy gaming venues between 2003 and 2005, records show.
IRS agents described the civil investigation into the Miccosukee Tribe's unreported distribution of gambling profits to about 650 members as "larger and broader" than the Cypress probe. The quarterly gambling distributions would amount to about $61,000 annually per member, though the IRS court filings did not indicate how long the tribe has made such payments.
A source with knowledge of Miccosukee operations told The Miami Herald that every quarter, tribal police used armored SWAT vans and patrol cars to take reams of cash stuffed in plastic bags from the Miccosukee casino near Tamiami Trail to the reservation for distribution to tribe members.
IRS agents who examined the tribe's financial records when they launched the investigation in 2005 concluded that Cypress, who was replaced as the Miccosukee chairman in January, "misappropriated" the tribe's money for his personal use — including making "high-end purchases" — without reporting the income, agents say.
The scope of the tribe's gambling enterprise — a closely guarded secret — surfaced in new court filings in the IRS' quest for Cypress' credit card and other records from Morgan Stanley, the tribe's bank.
Miccosukee attorneys argue that because the tribe is a sovereign nation, it doesn't have to turn over the Morgan Stanley records — an assertion that Justice Department and IRS officials strongly dispute.
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