St. Croix Chippewa mis-spent at least $ 1.5 million in casino cash, regulators say

At least $ 1.5 million in casino funds were pocketed by the tribal chiefs of St. Croix Chippewa, or used for various expenses, including trips to Hawaii and Las Vegas with little or no documentation or receipts, federal regulators said this month.

“The dollar amounts are staggering,” said Eric Dahlstrom, an Arizona lawyer with approximately 40 years of experience in Indian legal matters. “I certainly haven’t seen (a notice of violation) as significant as this one. … Tribal game funds are strictly regulated and should be used to provide government services and build much needed infrastructure. “

Among the payments listed in the National Indian Gaming Commission Notice of violation were 74 for a total of $ 154,173 which went to longtime tribal president Lewis Taylor from 2014 to 2017. Tribal Council member Elmer “Jay” Emery received 94 payments totaling $ 235,888 during the same period, according to the agency.

Additionally, regulators said that from 2015 to 2017, the St. Croix Casino Turtle Lake issued 275 payments totaling $ 562,246 to seven tribal members.

In total, the 29-page violation notice lists 527 violations of the Federal Indian Gaming Regulation Act, NIGC regulations, and Tribal Ordinances. The notice says each violation could result in a fine of $ 52,596, meaning the total fine could exceed $ 27 million.

Regulators paint a picture of sloppy bookkeeping where casino money has been thrown around freely and without documentation.

“Many payments – worth hundreds of thousands of dollars – have been made to the same small group of people, the only supporting document often being a disbursement request form with the words ‘travel’ or ‘consultation fee’ scribbled in the comments. section ”, indicates the opinion signed by the president of the NIGC, Jonodev O. Chaudhuri. “Following further questioning by NIGC investigators, the tribe was unable to produce documentation to support the treatment of payments as gambling operation expenses.”

The seriousness of the charges prompted the agency to bypass its normal process of sending out a letter of concern before a notice of violation was issued.

“In this case, however, given the pervasiveness and severity of the violations, as well as the fact that many of the individuals identified in the notice of violation are still able to direct the net casino and gaming revenues, the president decided to proceed directly “and issue the opinion, the document said.

Rory Dilweg, a California lawyer who has more than 20 years of experience in Indian legal matters, said the opinion could trigger further investigations.

“The NIGC has documented over $ 1.5 million in unrecorded funds. This is very serious,” Dilweg said in an email indicating that the NIGC “may issue an order to shut down the tribe’s casinos.”

In addition to that, he said, “there could also be actions taken by other agencies such as the FBI, IRS and the Wisconsin Department of Revenue.”

Approximately 2,000 people live on the St. Croix reserves in Barron, Burnett, Polk and Washburn counties. St. Croix Casino in Turtle Lake employs about 1,000 people and the Tribe’s Hole in the Wall Casino in Danbury employs about 200, according to the Great Lakes Inter-Tribal Council.

The appeals to Lewis Taylor; Jeff Taylor, chairman of the Tribe Gaming Commission; and officials from the tribal attorneys office were not returned on Thursday. Aaron Harkins, a Minneapolis attorney who represents the tribe on certain issues, said, “I can’t comment on everything about this client. ”

The tribe can appeal the findings of the opinion to the full NIGC.

The advisory leaves little hope that the tribe can repair the damage. “There is no way to correct these violations, but (President Chaudhuri) will take into account the tribe’s efforts to mitigate the damage when determining an appropriate civil fine,” the notice said.

Other violations listed in the notice include:

  • From 2015 to 2017, the Turtle Lake Casino paid $ 301,287 in consulting fees to Lawrence Larsen “without any support (ie contract, invoice receipts) for goods or services provided by Larsen” . Regulators did not provide any additional information about Larsen and noted that tribal officials could not produce a contract with Larsen or “provide a written description of the terms of a verbal agreement” with him.
  • In 2017, Larsen received $ 12,746 for his travel. Larsen received payment twice for the same trips but only provided receipts for one trip. A February 2017 disbursement request form shows three first-class trips for Larsen to fly from Honolulu to Los Angeles, Los Angeles to Seattle, and Seattle to Atlanta.
  • Council member Emery used a casino credit card to purchase four first-class plane tickets to Hawaii in 2016, although a tribal travel ban enacted in 2014 was still in effect. The ban was enacted in 2014 to meet “the challenge of meeting financial obligations in an economic climate that generates reduced income streams,” according to a council resolution.
  • In December 2016, the Turtle Lake Casino presented checks for $ 10,000 to Lewis Taylor and the four board members. The disbursement request for board members read “Travel to Las Vegas Legal Symposium”. Taylor’s disbursement form mentioned “Travel AZ Legal Symposium”. Checks were cut before trips and there are no vouchers or receipts available.
  • Two board members – Stuart Bearheart and Carmen Bugg – each received $ 15,000 for a “project allowance,” regulators noted. The tribe was unable to provide regulators with a description of the project.

State and federal officials declined to say whether there had been any criminal investigations following the NIGC report.

Contact Cary Spivak at (414) 223-5467 or cspivak@jrn.com. Follow him on Twitter at @cspivak or Facebook at https://www.facebook.com/cary.spivak