For 15 years, the Rolling Hills casino has been a money faucet for the Paskenta Band of Nomlaki Indians. Casino money.
In 2002, after the federal government restored the band’s full tribal status, they opened the casino near Corning, Calif., and the money poured in.
Revenue from the casino’s 840 slot machines, blackjack tables and 24-hour restaurants is estimated at $100 million a year, according to the Sacramento Bee. Every person in the 300-member tribe reaps a direct economic benefit from the casino — about $54,000 a year for each adult member. Casino money paid for a $3 million jet for the tribe, and, at one point, more than 10 pounds of gold.
But the sudden bounty also led to a decade of infighting — at one point, literally, with military-grade weapons — among tribal members.
And as tribe members fought, a federal indictment filed last week says, the people hired to safeguard the tribe’s wealth bled the tribe’s bank accounts.
A family that worked for the tribe was accused last week of embezzling nearly $6 million, according to a federal indictment, using stolen funds to live what a band leader called “a life of obscene luxury.”
John Crosby, a former FBI agent who served as the tribe’s economic development director, used tribal money to buy an $838,000 home and fill it with swimming pools, “infinity” spas and a putting green, the indictment says. He chartered a $105,000 flight to Hawaii and a $65,000 trip to Honduras, then spent more than $100,000 on gold coins, all on the tribe’s dime.
His 73-year-old mother, Ines, who had worked for the tribe since 1996, spent $55,000 on a trip to New Zealand, $11,000 on jewelry and more than $17,000 on a koi pond.
Her sister, Leslie Lohse, paid down her personal credit cards, according to the indictment, and claimed she used the money for travel.
Casino money laundering
“They and their co-conspirators used vicious and callous methods of intimidation and coercion to maintain access to the Tribe’s money, millions of which they stole in order to live a life of obscene luxury, while services to Tribal members went unfunded and Tribe members lived in fear of economic retaliation,” tribal Chairman Andrew Alejandre said in a statement.
As the scheme unraveled, the indictment accuses the trio of lying to federal agents, fabricating documents and lying on tax returns to conceal years of theft.
If convicted, the trio faces decades in prison and hundreds of thousands of dollars in fines, according to the Department of Justice.
All three suspects started working for the tribe before the casino opened. Because they were so deeply embedded in the tribe’s inner-workings, they were able to punish people who accused them of stealing by taking away their tribe stipends, tribal officials say.
“These persons. . . abused and corrupted the Tribe’s institutions of government and terrorized its members,” Alejandre said. The victims included “elders who lived in fear of losing the income that they depended upon to meet basic needs and who, in some cases, had such income taken from them for speaking out, leaving them destitute.”
Since the tribal reservations are recognized as sovereign nations, they can pass their own laws and draft their own constitutions, according to the Bee: “They decide who’s in charge, who’s a member — and who’s not — and who gets a slice of casino revenue that can exceed $1 million a year per member. Festering family rivalries and power struggles often boil to the surface, and several thousand California Indians have been disenrolled in the last decade.”
For the Paskenta tribe, that happened in April 2014.
According to The Washington Post’s Abby Phillip, Tribal Chairman Andy Freeman ousted 76 members of the Henthorne/Pata family then, accusing Tribal Council members who belonged to that family of not having an authentic genealogical link to the tribe, and of misappropriating millions of dollars.
Around that time, the Paskenta Gaming Commission suspended the license of Jon Pata, a commission member accused of misappropriating more than $2 million. Pata is the brother of Ines Crosby, who was also accused in the scandal.
On one occasion, The Post reported, she went to the casino, cashed a check for nearly $200,000 and “walked out with grocery bags full of cash.”
That was around the time accusations of John Crosby’s thefts made headlines. Tribe members demanded to know where the $3 million plane was and what happened to the 10 pounds of gold. Freeman hired a group of AR-15-carrying security guards to protect the casino, who squared off with “tribal police” loyal to the other side.
Crosby deflected blame about the missing plane and precious metals in a statement to the Bee. He said both were being kept in a safe place and that the accusations would soon be sorted out.
A month before making that statement, according to the indictment, Crosby had initiated a cyberattack on the casino in an attempt to destroy evidence.
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