Miccosukee Tribe Sues Insurance Company Over $5 Million Credit Scam

Written By Rashid Mohamed on December 30, 2022
Miccosukee Tribe's $5.3 million claim of theft denied by insurer

Florida’s Miccosukee Tribe started legal proceedings against its insurance provider, Great American Insurance Company. The tribe’s insurer refused to pay $5.3 million in theft claims. 

The tribe’s casino, the Miccosukee Casino & Resort in western Miami-Dade County, was the scene of an elaborate deception. A group of video game machine technicians embezzled millions for more than four years.

Group would create ‘ghost credits’ then exchange them for money

The Miccosukees only operate one of the Florida casinos. The Seminole Tribe of Florida operates the other six properties in the Sunshine State.

Lester Lavin was the alleged mastermind of the scheme. In 2020, a court found him guilty of theft, computer fraud and money laundering. Prosecutors convicted four of Lavin’s co-conspirators and three spouses of the same crimes.   

Lavin was an employee of the casino from 2003 to 2015. He was a video technician for the first six years. The tribe promoted him to video supervisor in 2009. A couple of years later, Lavin plotted with his supervisor and two other technicians to defraud money from the casino. 

They did this by manipulating the computers inside the video gaming machines to create “ghost credits.” The employees were exchanging the credits for cash, according to the complaint filed by the tribe in the U.S. District Court in Miami. 

Lavin and his accomplices managed to swindle up to $5.3 million in payouts before an anonymous tip in May 2015 alerted casino officials to the scam. 

Tribe eventually sought help from FBI

After first receiving the tip, the tribe conducted its own investigation. It revealed a single video technician inserting vouchers into gaming machines while no customers were playing. From this evidence, the tribe concluded that around $16,478 had been pilfered. 

This, however, fell short of the $50,000 deductible in the casino’s $5 million theft policy from Great American Insurance Company. 

Casino officials could not determine the method used to pull off the theft. Furthermore, officials failed to figure out the duration of the scam and the exact amount stolen.

The tribe eventually sought the help of the FBI, which immediately began its investigation into the matter with the help of an internal auditor specializing in the gaming industry. 

The FBI told the tribe not to discuss the issue with anyone.

The auditor filed a report in August 2017, which was shared with the FBI. It revealed that multiple employees manipulated gaming machines to produce fake credit vouchers. And they had been cashing them in for four years, from January 2011 to May 2015. It was discovered that at least $5,283,638 was stolen – far more than the tribe’s initial determination of $16,478.

FBI investigations continued for two more years. In July 2019, a federal Grand Jury issued a 63-count indictment charging eight individuals – five employees and three of their spouses – with participating in the scam. 

Insurer denies claim citing a failure of ‘timely notice’

A month later, the tribe submitted its $5.3 million claim. It furnished all the necessary information and documentation, confident the claim would be paid, according to the lawsuit.

“[Great American] was aware of all relevant dates for the claim from its inception; yet [it] treated the claim like it was going to be paid and gave plaintiff no indication that it was subject to any procedural notice issue.”

However, in April 2021, with no previous warning, the insurer determined that the tribe did not manage to “provide timely notice” of the loss. Therefore, the insurer not only denied the $5.3 million claim but also canceled the theft policies covering the loss. 

According to the insurer, the tribe failed to inform them about the loss in May 2015. The tribe responded that it was not permitted to talk about the case while the FBI investigations were ongoing. It gave the insurer notice of the loss “as soon as possible, as required by the policies.”

So far, Great American Insurance Company has yet to respond in court to the tribe’s lawsuit. 

Photo by Shutterstock.com
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Rashid Mohamed

Rashid Mohamed is an international journalist with a special interest in sports writing. He is a Poli-Sci graduate of Ohio University and holds an A.A.S in Journalism. He has worked in a number of countries and has extensive experience in the United Nations as well as other regional, national, and international organizations. Rashid lives and writes out of Denver, Colorado.

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