Miccosukee Tribe Sues Insurer for $5M Stolen in ‘Ghost Credit’ Casino Scam

Posted on: December 21, 2022, 11:36h. 

Last updated on: December 21, 2022, 12:43h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

The Miccosukee Tribe of Florida is suing its insurance provider, Great American Insurance Company, for failing to pay out on the theft of over $5 million from its casino.

Miccosukee Casino
A group of dishonest slots technicians at the Miccosukee Casino & Resort in western Miami-Dade County, pictured, tampered with gaming machines so that they printed out false winning tickets. (Image: NBC)

The tribe was a victim of an elaborate embezzlement scheme engineered by video-gaming machine technicians at its Miccosukee Casino & Resort in western Miami-Dade County.

The alleged mastermind, Lester Lavin, was convicted in 2020 of theft, computer fraud, and money laundering, along with four other technicians and three of their spouses.

Lavin was discovered to have created bogus slots credit vouchers that could be exchanged for cash via the cage and at ATMs on the gaming floor.

He and his associates obtained $5.3 million in payouts before an anonymous tip alerted casino officials to the scam.

Slots Technicians Go Rogue

Despite the conviction of the perpetrators following an FBI investigation, Great American refused to pay because it said the tribe took too long to make a claim.

The tribe argues it did not uncover the full extent of the theft until it received an auditor’s report in 2017, two years after it first became aware of suspicious activity. Until then, the tribe believed it had been swindled out of around $16,500, although it was aware the total could be higher.

After receiving the unpalatable news that it was looking at a $5 million hole in its accounts, the tribe still had to wait until the conclusion of the FBI investigation. Agents told the tribe it couldn’t discuss the situation with anyone while this was ongoing.

It was the FBI that figured out how the deed was done. The technicians had discovered a way to tamper with the gaming machine’s computers. This caused them to generate credit tickets that falsely showed they had won money.

Then, conspirators who didn’t work at the casino would exchange the vouchers for cash on the casino floor. The so-called “ghost credits” scam had been going on for four years — from January 2011 to May 2015 — by the time the tribe received the tipoff.

The conspirators used their ill-gotten gains to buy homes, vehicles, investment properties, and prepaid college plans for some of their children, according to court documents.

Untimely Notice

In July 2019, a federal Grand Jury issued a 63-count indictment against the eight individuals, meaning the tribe could now file an insurance claim.

“[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,” claims the lawsuit.

“…[But] almost twenty months into the Claim adjustment, and with no previous warning, [Great American] denied Plaintiff’s Claim on April 8, 2021,” it adds.

Great American told the tribe it had “failed to provide timely notice” and the “policies providing coverage for the loss were canceled by the time the notice was given.”

The tribe says it gave the insurer notice of the loss “as soon as possible, as required under the policies.”

Lawyers for Great American have not yet responded to the lawsuit.