A federal grand jury is poring over the finances of the Seminole Tribe of Florida, placing the $300-million-a-year gambling empire under intense scrutiny for alleged nonpayment of taxes.
Robert Saunooke, an attorney for former tribe chairman James Billie, said he has heard from several sources that a grand jury is reviewing evidence regarding tax issues, tribal contracts with vendors and others, and the bond issue for the $410 million Hard Rock Casino venture in Hollywood.
Tribal leaders allegedly have been giving millions of dollars' worth of gifts to themselves, friends, relatives and other tribal members, including Land Rovers, Lexuses, front-row tickets to sporting events, a chartered jet and million-dollar payouts.
If an individual gives money or an item worth more than $11,000, the giver has to pay tax on that item. The previous gift limit was $10,000. The tribe allegedly has not been paying taxes on such gifts.
''It could possibly mean criminal charges as well as huge financial responsibility to the tribe as well as the individual council members personally,'' Saunooke said. ``This could have tax consequences to the individual tribal members.''
Representatives from the U.S. Attorney's Office and the Internal Revenue Service on Thursday would not confirm the grand jury's existence.
= [100.0] HEADLINE SHOULD BE 22-28 POINT HEADLINE SHOULD BE 22-28 POINT Dobzinski, who spoke only about general tax rules, put it this way:
``Generally speaking, the same income tax and gift tax rules apply to Native Americans as well as other Americans.''
The punishment for not paying taxes varies depending on whether it is a criminal or civil issue, Dobzinski said.
''If one is found guilty of tax fraud, there could be substantial taxes, penalties and interest that would need to be paid,'' he said, later adding that jail time is also possible.
The Seminoles -- once a poor community in the Everglades -- have evolved during the last two decades into a gambling powerhouse. The roughly 3,000 tribal members each receive a $3,000 monthly dividend.
Native American tribes must follow the federal Indian Gaming Regulatory Act when spending gambling profits. The law 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.
A 2001 Herald investigation documented lavish and unreported spending by Seminole leaders.
In 2001, internal memos noted that the tribe might be violating federal law by failing to report money spent by the Tribal Council.
Hugh Chang Alloy, the tribe's controller, wrote an April 6, 2001 memo warning the council that it might be breaking the rules. Chang Alloy was later fired by the Tribal Council. Saunooke wrote a memo a month later and was also fired.
''I stand by that opinion that they should have paid taxes,'' Saunooke said Friday.
The grand jury has been meeting for eight months, according to Joel Hirschhorn, an attorney for Tribal Chairman Mitchell Cypress.
The tribe's practice of not paying taxes on gifts continues, Hirschhorn said.
''Old habits are hard to change,'' he said.
Hirschhorn said the tribe believed they didn't have to pay the gift tax after a South Florida law firm told them they didn't have to. Hirschhorn declined to name the firm, which he said had a tax-law department.
Hirschhorn said if the tribe does have to pay, the amount shouldn't include penalties and interest because they were relying ``in good faith upon the advice of a lawyer.''
Jim Shore, the Seminole Tribe's general counsel, said he didn't know about any grand jury.
http://www.miami.com/mld/miamiherald/6817256.htm
Robert Saunooke, an attorney for former tribe chairman James Billie, said he has heard from several sources that a grand jury is reviewing evidence regarding tax issues, tribal contracts with vendors and others, and the bond issue for the $410 million Hard Rock Casino venture in Hollywood.
Tribal leaders allegedly have been giving millions of dollars' worth of gifts to themselves, friends, relatives and other tribal members, including Land Rovers, Lexuses, front-row tickets to sporting events, a chartered jet and million-dollar payouts.
If an individual gives money or an item worth more than $11,000, the giver has to pay tax on that item. The previous gift limit was $10,000. The tribe allegedly has not been paying taxes on such gifts.
''It could possibly mean criminal charges as well as huge financial responsibility to the tribe as well as the individual council members personally,'' Saunooke said. ``This could have tax consequences to the individual tribal members.''
Representatives from the U.S. Attorney's Office and the Internal Revenue Service on Thursday would not confirm the grand jury's existence.
= [100.0] HEADLINE SHOULD BE 22-28 POINT HEADLINE SHOULD BE 22-28 POINT Dobzinski, who spoke only about general tax rules, put it this way:
``Generally speaking, the same income tax and gift tax rules apply to Native Americans as well as other Americans.''
The punishment for not paying taxes varies depending on whether it is a criminal or civil issue, Dobzinski said.
''If one is found guilty of tax fraud, there could be substantial taxes, penalties and interest that would need to be paid,'' he said, later adding that jail time is also possible.
The Seminoles -- once a poor community in the Everglades -- have evolved during the last two decades into a gambling powerhouse. The roughly 3,000 tribal members each receive a $3,000 monthly dividend.
Native American tribes must follow the federal Indian Gaming Regulatory Act when spending gambling profits. The law 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.
A 2001 Herald investigation documented lavish and unreported spending by Seminole leaders.
In 2001, internal memos noted that the tribe might be violating federal law by failing to report money spent by the Tribal Council.
Hugh Chang Alloy, the tribe's controller, wrote an April 6, 2001 memo warning the council that it might be breaking the rules. Chang Alloy was later fired by the Tribal Council. Saunooke wrote a memo a month later and was also fired.
''I stand by that opinion that they should have paid taxes,'' Saunooke said Friday.
The grand jury has been meeting for eight months, according to Joel Hirschhorn, an attorney for Tribal Chairman Mitchell Cypress.
The tribe's practice of not paying taxes on gifts continues, Hirschhorn said.
''Old habits are hard to change,'' he said.
Hirschhorn said the tribe believed they didn't have to pay the gift tax after a South Florida law firm told them they didn't have to. Hirschhorn declined to name the firm, which he said had a tax-law department.
Hirschhorn said if the tribe does have to pay, the amount shouldn't include penalties and interest because they were relying ``in good faith upon the advice of a lawyer.''
Jim Shore, the Seminole Tribe's general counsel, said he didn't know about any grand jury.
http://www.miami.com/mld/miamiherald/6817256.htm
