Friday, August 10, 2012

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

That was Judge Kathy Williams in sentencing former Seminole leader David Cypress to 18 months in prison.  Cypress had asked for probation and the government was looking for 2 years.  From Jay Weaver's piece:

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 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. 
Very interesting stuff about how the gambling profits are distributed:
In court papers, Hirschhorn revealed that the Seminoles’ gaming profits reached $300 million a year by 2001, with monthly dividends paid to each member. The Seminoles have 3,800 members.Under the distribution formula, every Seminole family of four receives dividends of about $30,000 a month.
Cypress, a notorious big spender who built a massive Mediterranean-style mansion with his millions, was paid a salary of $500,000 on top of the monthly dividend. Like other Seminole council leaders, Cypress controlled a discretionary fund that he tapped to dole out money to family and other tribal members.
Meantime, if you want more Apple/Samsung coverage, check out this piece by Conan:

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Anonymous said...

This is egregious! After being the victims of genocide, and having their land stolen, the Feds are still stealing income from the Native Americans. The idea that they should pay taxes on the "privilege" of hosting gambling operations is ludicrous. No amount of money will ever make up for what they've lost. FREE CYPRESS!

Anonymous said...

Dude - you missed the part about the fancy lawyer from the big firm who argued a motion without first filing an appearance, and who was not even admitted to practice in the district -

career defense attorney said...

so much for the pundits who claimed kathy could not be fair and impartial and was too much a liberal defense attorney

she follows the law

and exercises great restraint, because with diamond joel hirschorn making his usual facacta arguments as hepretends to be a defense attorney, i would have launched his client as a penalty for hiring that blow hard to appear before me.

Anonymous said...

you are ridiculous; this guy did not march to Oklahoma. his ancestors may have but he reaps a $30k a month reward for the collective guilt that has resulted in indian tribes getting plush casino money. have no problem with that. but have a problem with this idiot crying foul, when he is a fool.

Anonymous said...

"Uniquely American"? Really? No one else from any other country has ever cooked the books? Assuming DOM accurately related the quote, I don't think "uniquely" means what Judge Williams thinks it means.