Seminoles sue chief, aide over stocks
By JEFF TESTERMAN
© St. Petersburg Times,
The Seminole Tribe of Florida has accused Chief James E. Billie and Timothy W. Cox, his handpicked administrator, of directing a wide-ranging, illegal stock manipulation scheme that drained the tribal treasury of $20-million.
In a lawsuit filed Wednesday in federal court in Miami, the tribe claims Billie and Cox, along with stockbroker Peter T. Ripich and financial services firm Raymond James & Associates, were part of a deception that resulted in $350-million in unauthorized stock trades using tribal money.
The lawsuit says some of the losses occurred through day-trading in risky tech stocks, some from constant churning of the Seminole portfolio and some when Cox and Billie diverted millions to an Internet gambling company in Belize.
"We look forward to aggressively pursuing this case and seeking the return of the tribe's money," said Harley S. Tropin, a Miami attorney and securities expert retained by the tribe.
Billie, Cox and Ripich could not be reached for comment.
The accusations in the federal lawsuit are the latest in a string of allegations this year that have divided Billie and his followers from the 2,800-member tribe.
Billie, 57, a flamboyant folk singer and alligator wrestler who has led the Seminoles since 1979, was suspended by the tribe in May pending the outcome of a federal sexual harassment lawsuit against him by a former employee and the completion of an audit.
Cox, 32, a former Georgia police officer stripped of his certification for lying, was given a free hand by Billie to handle tribal business but was fired several days before Billie's suspension. Tribal councilmen questioned a $500,000 fee Cox took while handling negotiations to build two Hard Rock casino-hotels and a secret deal he put together to take ownership of a Nicaraguan hotel.
Watching the controversy have been agents from the FBI, the IRS and the U.S. Interior Department who have been investigating Billie and possible corruption involving tribal businesses since last year.
In the lawsuit filed Wednesday, Billie and Cox are accused of embezzlement, federal mail fraud and violations of securities laws.
According to the tribe's suit, Billie acted without council approval in 1999 when he authorized Cox to liquidate the tribe's $30-million portfolio of conservative, blue-chip stocks and invest the money through Ripich, Cox's old Army buddy who worked as a broker at the Raymond James office in Coral Gables.
With the cash pumped into Internet and high-flying tech stocks, the portfolio's value at one point reached $60-million, according to the suit. But with Ripich day-trading and borrowing unnecessarily on margin -- and with the tech stocks diving when the Internet bubble burst in the spring of 2000 -- the Seminole account plummeted to $10-million, the suit says.
Attorneys for the tribe said Ripich churned the portfolio by buying and selling blocks of America Online and lesser known Internet stocks several times in a single day. They said the broker also borrowed to make trades on margin at a time when the tribal account at Raymond James held $2-milliion.
The unauthorized trading added up to $1.6-million in excessive fees, commissions and interest on margin loans, the suit says.
The tribe also accuses Billie and Cox of embezzling tribal funds by writing checks on the Raymond James account totaling $2.7-million between April and July 2000. The money was funneled to Virtual Data, an offshore Internet gambling company in which Cox, Billie and former tribal computer consultant Dan Wisher all had an interest.
Cox and Wisher recently set up a Web site on a computer server in Nicaragua in which it is claimed that other tribal councilmen misappropriated millions and illegally removed Billie from office. The site is called "Seminole-truth.com."
The tribe is seeking $20-million in damages in its suit, plus interest, costs, attorneys fees and unspecified punitive damages, Tropin said.
Larry Silver, a spokesman for Raymond James at the company's headquarters in St. Petersburg, said Wednesday the company could not comment because its attorneys had not yet seen the lawsuit.
- Jeff Testerman can be reached at (813) 226-3422 or firstname.lastname@example.org.
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