Eastlick admits bribery, tax fraud
Sentencing in Rocky Boy scandal set for Aug. 15
May 2, 2014
A Havre psychologist is the latest of a string of defendants to plead guilty to charges alleging fraud and embezzlement at Rocky Boy’s Indian Reservation.
The indictments also involve a former state and tribal official, while some unnamed figures still wait in the wings with possible charges pending.
Eastlick pleaded guilty to one charge in each of three cases in which he was indicted, and charges in a fourth and other charges in those cases will be dismissed.
U.S. District Judge Brian Morris, who presided at the hearing, scheduled Eastlick’s sentencing for Aug. 15. Eastlick faces up to 10 years in prison for the bribery charges and up to three years for tax fraud.
The plea agreements also require Eastlick to pay the Internal Revenue Service $66,313 in restitution, a preliminary figure of $258,487 in restitution in one bribery case and $100,000 in restitution in the other.
The agreements also say the government may ask the judge for a reduced sentence “to reward the defendant for any substantial assistance provided before sentencing.”
Fourth of seven defendants to change plea
Eastlick Jr. is the fourth of seven defendants to plead guilty to charges in eight cases unsealed last year and this year involving him, and the former tribal and state official who is involved in seven of the indictments.
Former tribal council member and state Rep.Tony Belcourt and his wife, Hailey Belcourt, pleaded guilty in April and are awaiting sentencing Aug. 14.
Eastlick Jr.’s father, James Howard Eastlick Sr. of Laurel, also pleaded guilty in April and also is scheduled for sentencing Aug. 15.
One of Eastlick Jr.’s former business partners, Hunter Burns of Box Elder, pleaded guilty in the case in which Eastlick Jr.’s charges are being dismissed. Burns is set to be sentenced July 10.
Eastlick Jr.’s sister and brother-in-law, Tammy and Mark Leischner of Laurel, are scheduled to go to trial May 12.
Havre businessman and former Havre school board chair Shad Huston, who the government says was another business partner of Eastlick Jr., is scheduled for trial June 9.
So far, one or another defendant has pleaded guilty in all of the eight cases unsealed involving the Belcourts and Eastlick under a complex inter-related set of plea agreements.
Allegations of a conspiracy of corruption
One or more of the parties named are involved in all eight indictments unsealed, with Eastlick Jr. listed as a defendant, relative or business partner of a defendant in all eight.
The latest indictments also implicate “an associate” and “Tribal Councilman A,” without saying if those are two people or the same person.
The first indictment unsealed last year indicted the Belcourts, Eastlick Sr. and the Leischners, with later documents saying Eastlick Jr. also was involved although not indicted.
The defendants were accused of setting up a consulting company. This company was used to double-bill the Chippewa Cree Construction Corp., on which Tony Belcourt was CEO and chief contracting officer, to ship an order of pipe used — and paid for with federal funds — to build a new water system that will serve 30,000 people on the reservation and across north-central Montana to the Rocky Mountain Front.
Court documents said Belcourt was hired as CEO of the corporation when it was formed in 2006 but in 2010 he contracted his services as CEO through Ingin Enterprises, in which he and Eastlick were partners.
After the corporation started paying Tammy Leischner’s company, Eastlick Jr. also provided $45,000 to the company to keep the process moving after the company fronted Belcourt $101,000 to buy controlling interest in a pipe company in Billings, the government said.
Covering ranching expenses
The next indictment said Eastlick Jr. and Burns bribed Tony and Hailey Belcourt to provide contracts to Hunter Burns Construction, including Eastlick providing a “loan” to the Belcourts to cover sale of cattle used as collateral in a bank loan.
Eastlick was 49 percent owner of the construction company at the time, with Burns’ 51 percent ownership making it a minority-owned business and giving it preference in tribal contract awards.
Aug. 7, 2009, less than two weeks after a bank started foreclosure proceedings on the Belcourts’ ranch, Tony Belcourt approved and provided a $94,050 payment from the tribal construction company to Hunter Burns’ company, the government said.
One week later Hunter Burns Construction issued a $35,000 check to Hailey Belcourt in a reseeding contract, although she had no experience or equipment to use in reseeding, the government said. Oct. 16, 2009, Tony Belcourt awarded a reseeding contract for $54,000 to Hunter Burns Construction, although it also had no experience or equipment to use in reseeding.
The Belcourts sold cattle in 2009 through an auction company in Colorado. The cattle were collateral in one of eight loans totalling more than $700,000, the government said. The Belcourts had the money deposited in another person’s account to hide the transaction from the bank, it added.
Once the bank discovered the sale, it demanded $107,153.09 from the cattle sale, and the auction company issued a new check to the Belcourts and demanded repayment of the check it already had issued, the government said.
Nov. 21, 2009, Tony Belcourt approved and authorized a payment of $148,792 to Hunter Burns Construction, and two days later Eastlick Jr. arranged a $100,000 loan from the company to Hailey Belcourt, to be repaid in four weeks. The promissory note was subsequently “replaced” by a document in January 2010 modifying the terms of the loan, the government said.
“Eastlick has admitted that this document was created in 2013 when the conspirators became aware of the investigation,” a court document says.
Partner in another case
Although Eastlick Jr. was not indicted in the next charges filed against the Belcourts, the government lists him as a partner in business interests of another person indicted.
In that case, Huston is accused of paying bribes to the Belcourts to receive contracts in the reconstruction of the Rocky Boy clinic, destroyed in the 2010 flooding. He received both federal money and insurance money, the government said.
The government said Eastlick was a partner in some of Huston’s businesses.
Payday loan tax evasion
In the first indictment against Eastlick unsealed Thursday, Eastlick was charged with failing to report on his tax returns income from payday loans he provided to tribal employees.
Eastlick “or an associate,” who is not named in the offer of proof, wired money for loans to a bank account set up for “JE Loan Program,” the government said. The loans were repaid through deductions in employee paychecks.
The loans generally charged 10 percent and were paid back within 10 weeks, with annualized percentage rate of interest of 70 percent to 80 percent.
JE Loans had similar arrangements with other enterprises including the Rocky Boy clinic and school district, the government said.
Eastlick’s associate also was paid a significant amount of the loan repayments and shared them with Eastlick, the government said.
On his tax returns for 2008-2011, Eastlick included interest from the loans only in 2009, the government said. He only listed a fraction of the interest he received that year on his taxes, it adds,
On his 2011 tax return, Eastlick reported a total income of $367,689 with $44 in interest from his bank account listed. That excluded $53,216 in interest income he received from the Chippewa Cree Tribe, the Rocky Boy clinic and his associate, the government said.
Bribing a tribal councilman
In the second indictment unsealed Thursday, Eastlick Jr. pleaded guilty to bribing “Tribal Councilman A” in return for getting contracts for Hunter Burns Construction.
An offer of proof says “Tribal Councilman A” arranged for the partnership between Burns and Eastlick with the understanding that if he lost his position on the council, he would replace Eastlick as the partner “and continue to use the construction company as a vehicle to obtain tribal funds.”
The document says the council member, a former chair of the Business Committee, also served on the Chippewa Cree Construction Corp. board and “exerted significant political control over the two boards as well as over the affairs of the Tribe as a whole.”
The document says the councilman engaged in a series of fraudulent business transactions with Hunter Burns Construction.
In the fraudulent claims case in which Burns pleaded guilty, $100,000 of American Recovery and Reinvestment Act funds was paid to a false bill submitted by Hunter Burns Construction, the government charged.
The councilman received, through a business name, $25,000 of that $100,000, billed as contract mobilization costs, an offer of proof says. A few weeks later, the tribe also paid Hunter Burns Construction the $15,000 it actually bid for mobilization costs
One year later, in April 2011, Hunter Burns Construction was paid $50,000 labeled an “advance payment,” of which the council member received $20,000 through a family member, the document says.
From July 28, 2009, through Nov. 30, 2011, Councilman A received $258,487 through 17 payments Hunter Burns Construction made to him, his business or his children, the document says.