New court actions on Rocky Boy fraud, embezzlements

A former tribal council member at Rocky Boy’s Indian Reservation was scheduled to plead guilty to charges today in federal District Court in Great Falls in three separate cases alleging fraud, corruption, embezzlement and tax evasion.

This comes after two weeks of activitiy in the court where more off-reservation people have been charged in a case alleging use of the Chippewa Cree Tribe’s online lending business to facilitate and hide fraud and embezzlement on the reservation, and a Billings businessman faces new charges in yet another case.

Brian Kelly Eagleman, 53, a former member of the tribe’s business committee who lost a bid for re-election in 2012, filed plea agreements with the U.S. Attorney’s Office to plead guilty in three separate cases stemming from investigations of the Guardians Project. Guardians is a collaborative interagency project established by U.S. District Attorney Mike Cotter to investigate allegations of fraud, corruption and embezzlement in Montana’s Indian Country.

Violet Eagleman, 47, who faces a charge of failing to file currency transaction reports in one of the cases in which Brian Eaglemen signed a plea agreement, has filed a motion asking the government to dismiss the charge against her. The U.S. Attorney’s Office has responded that sufficient evidence has been presented to take her to trial and the motion should be denied.

The government says Eagleman cashed multiple $9,000 checks at a business operated by Shad Huston of Havre, using that amount to avoid the required reporting of checks of $10,000 or more being cashed.

Huston has pleaded guilty and been sentenced in several unrelated cases including on charges of failing to file currency transaction reports in other check cashings.

And a Billlings businessman who is a co-defendant in one of the Brian Eagleman cases pleaded not guilty Tuesday to new charges alleging tribal officials awarded multi-million dollar contracts, including one to demolish the flood-damaged Rocky Boy clinic, to one of his companies in exchange for kickbacks to the officials.

Kenneth David McGovern and his company, CMG Construction Inc., pleaded not guilty to conspiracy to defraud, scheme to defraud by wire and bribery.

In a separate case, new charges have been unsealed against off-reservation businessmen alleging they conspired to use the tribe’s online lending company, Plain Green, to cover fraud and embezzlement.

Richard Lee Broome, 58, of El Granada, California, pleaded not guilty in federal District Court in Great Falls Friday to charges of conspiracy to defraud the Chippewa Cree Tribe, scheming to defraud the tribe by wire, conspiracy to commit money laundering and two counts of bribery.

He joins Zachary Brooke Roberts, 45, of Billings and Martin Gasper Mazzara, 50, of Henderson, Nevada, who each pleaded not guilty in federal District Court in Great Falls June 15 to the same charges. Encore Services LLC of Nevada, of which Roberts is the president, also entered a plea of not guilty.

Roberts and Encore originally pleaded not guilty to the charges filed against them in May. The charges they pleaded not guilty to this month were new versions of the charges with additional information included.

All of the newer cases also involve people on and off the reservation who already have been sentenced in separate cases under complex multi-case plea agreements.

Those people named in the Plain Green, McGovern and Eagleman indictments include Huston; former state Rep. and tribal council member Tony Belcourt, who was head of the tribe’s construction corporation at the time of the fraud and embezzlement; council chair Bruce Sunchild; vice chair and former chair John “Chance” Houle; road department head and director of the Rocky Boy Health Clinic's Environmental Health Unit Tim Rosette; and Havre psychologist and former head of Rocky Boy’s health department James Howard Eastlick Jr.

Also named in the Plain Green indictment are Neal Rosette Sr. and Billi Anne Raining Bird Morsette, who pleaded guilty to and were sentenced in separate cases involving Plain Green earlier this year.

In the Plain Green indictment, Roberts, Broome and Mazzara are accused of taking fees from Plain Green, the third online lending company the Chippewa Cree Tribe has operated since 2009, and paid kickbacks to multiple people involved in the Rocky Boy fraud and embezzlement.

In the Eagleman cases, Brian Eagleman is accused of helping Billings businessman Kevin McGovern sell an asphalt mixer the tribe didn’t need to the Chippewa Cree Tribe at an inflated price, causing the the tribe’s road department to go over budget and requiring it to take out a $700,000 loan to continue operating. McGovern is scheduled for trial in September in one Rocky Boy fraud case and November in another.

According to the prosecution’s description of what it says it could prove in trial, Belcourt, a business partner of McGovern’s, directed McCovern to pay more than $200,000 in a finder’s fee to a business operated by Huston, who then made several payments to tribal officials involved in the scheme.

The offer of proof also says Brian and Violet Eagleman were more than $60,000 delinquent in their federal taxes, and one of the checks Huston sent out was a $50,000 check for them to use to pay the IRS. However, Brian Eagleman deposited and then withdrew that money in several transactions, telling the bank he needed the cash to pay bills, the offer of proof says.

The prosecution also is prepared to prove Eagleman owes about $246,000 in unpaid loans to the tribe through its tribal loan program. The offer of proof says Eagleman, a Business Committee member in 1993-95, 1999-2004 and 2009-2012, began taking loans in 2003. Despite a policy stating tribal members could not receive a new loan if they had an outstanding balance, the document says, between Jan. 17, 2012, and Nov. 5, 2015, Eagleman received 45 new loans totalling nearly $38,000, “well knowing that his ability to ever repay his obligations to the tribe was virtually non-existent,” the document says.

It adds that, at the rate of his $55 payroll deduction made in December 2015, it will take Eagleman 185 years to repay the tribe.