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At first, the Miccosukee Tribe thought nine employees stole less than $20,000 in a four-year embezzlement scheme at Miccosukee Resort & Hotel.
But, after enlisting the help of an internal auditor and the FBI, it turns out the stolen haul was much, much bigger: around $5.3 million.
And now, the Miccosukee Tribe is suing its insurer, Great American Insurance Co. (GAIC), to get that money back.
Thieves used ghost credits to steal millions from Florida casino
The team of eight thieves who stole from the Florida casino included casino techs familiar with its gaming system. They created credits out of thin air (ghost credits) and then redeemed those credits for cash.
A Department of Justice press release noted:
“(The defendants) tampered with the electronic gaming machines and caused the machines to generate false and fraudulent credit vouchers or tickets, which the defendants then exchanged for cash at ATMs located on the casino floor, or from floor cashiers or the casino treasury.”
The scam ran from 2011 to 2015. Over that time, the casino found that known members of the cashed in less than $17,000. Local police couldn’t find any evidence of additional theft, either.
However, after enlisting the help of an internal auditor, the casino discovered in 2017 the thieves took $5,283,637.50, according to court documents.
The tribe had an employee theft insurance policy with GAIC. It had $5 million in coverage. Getting reimbursed for their loss seemed like a slam dunk.
The insurance company gives tribe a surprise claim denial
Insurance policies can be tricky things. The tribe didn’t file a claim for the theft because the amount stolen was less than its $50,000 deductible.
It wouldn’t make sense to pay $50,000 just to get less than $17,000 paid back. So, the tribe chose not to file a claim. However, once the auditor’s report came back in 2017, the tribe realized the losses were far greater than it thought.
“It was not until that time that the precise nature of the crime was fully revealed, and the scope, intricacy, and magnitude of the loss first realized,” court documents said.
And because the Florida casino losses exceeded $5 million, it was to their advantage to file a claim. Paying $50,000 to get $5 million back made sense.
So, according to court documents, the tribe went through the claims process with GAIC starting in 2019. It took 20 months to file the claim and, during that time, the insurer gave no indication the claim would be denied.
“GAIC was aware of all relevant dates for the Claim from its inception; yet, GAIC treated the Claim like it was going to be paid and gave Plaintiff no indication that it was subject to any procedural notice issue,” court documents noted.
The tribe made various legal and financial decisions based on the belief GAIC would approve its claim. However, in April 2021, GAIC denied the tribe’s claim.
GAIC claimed that the tribe didn’t provide “timely notice” of the loss. Asking for $5 million four years after the theft wasn’t going to work for GAIC.
Miccosukee Tribe sues insurer after claim denial
Stunned by the denial, the tribe argued that they provided the insurer with all possible information when it was available.
It argued that it couldn’t share the details of the audit and FBI investigation because the FBI barred it from doing so. But, once a grand jury indicted the thieves in 2019, the ban was lifted and the tribe submitted its claim.
According to court documents, the tribe is suing GAIC for breach of contract. It’s asking GAIC to pay it back for the following:
- The money lost to theft
- Attorneys’ fees
- Damages associated with the claim
- Accumulated interest charges related to the trial
