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Former Seminole Council Member Guilty of Tax Fraud

April 14th, 2012 No comments

The Seminole Tribe of Florida is one of three federally recognized Seminole entities in the U.S. The tribe has four reservations, one of which is the Big Cypress Reservation.

From 1987 to 2010, David Cypress served as an elected representative for the Big Cypress Reservation to the Tribal Council, which is the governing body of the tribe. One of Cypress’s responsibilities was to handle monetary distributions to tribal members.

Reported by the Sun Sentinel, Mr. Cypress pleaded guilty on Friday to filing a false 2007 income tax return for underreporting income, and agreed to pay $5.46 million in restitution to the IRS. The restitution covers tax, interest, and penalties owed from 2003 through 2009. He faces up to three years in prison.

According to the IRS, much of the underreported income was distributed by Cypress to other tribal members from his discretionary council fund. Although a federally recognized tribe as a sovereign nation is not subject to federal income taxes, individual members of the tribe do not fall under the exemption.

A Sun Sentinel investigation revealed that Cypress distributed more than $160 million in tribal funds between 1999 and 2007. Considering $160 million was more than the distributions of the other four council members combined during that time, it’s no surprise federal authorities suspected wrongdoing.

Cypress is due to be sentenced on August 9.

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