Havre Daily News - News you can use

 
 

By Tim Leeds 

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.

James Howard Eastlick Jr ., who worked at Rocky Boy and was a former interim CEO of the Chippewa Cree Tribe’s Health Board, pleaded guilty to two charges of bribery and a charge of tax evasion.

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.

 

Reader Comments

(8)

Curious writes:

Who signed all those checks? Curious to know who all knew about this long ago AND, who all is really is involved in this mess. Will they be charged?

frankieh writes:

Kenny Blatt had his opportunity to do the right thing during his first term as a councilBOY many years ago. He was unsuccessful as a councilman. We need NEW people. Kenny is not above the fray. Kenny, in my opinion, is not the cure for what is ailing the reservation. He appears too self serving to be a leader. Furthermore, he brings too much personal animus to a job that requires a person to be magnanimous.

Justice4all writes:

Ken Blatt was accused and removed by all 8 councilmen because all 8 council knew exactly what was going on. Ken was accused by the tribal council these indictments are coming from the federal government, big difference. If any of the council was against corruption and really wanted change they had the opportunity to back their chairman. Not one of them wanted change. Ken took a $50,000.00 pay cut immediately upon taking office.

frankieH writes:

Seems as though my last post needed some proof reading. Sorry for the mistakes. I am usually more careful but I was upset with the councilBOYS inability to protect us from the predators that have robbed us and put our people in grave danger. The failure to complete the clinic and provide better health care for us has put us all in harm's way. I would sincerely hope that we can all agree that health care should be paramount in our concerns. It should be the ONE thing we can all agree upon.

frankieh writes:

We need a complete new council. If the current council was unaware of the activities of the accused and it seems as though were --WE MUST GET A NEW COUNCIL. The council is but puppets for allowing Eastlick to prey on us. We are at the mercy of thieves and liars. I am a shamed of every last councilBOY. Please people vote your head and not your heart. We people with courage and integrity to be our leaders.

moneytalks writes:

not a word of apology or any talk of restitution. this all started when the tribal laws were changed to allow those with a criminal background, the right to run for council. WE need to rewrite or rescind that amendment.

fedup writes:

It is sad when the Chippewa Cree People watch this unfold and our so called tribal officials do nothing. The councilman A needs to be removed by the tribal council and terminate the so called CEO Tony who was put on leave because our council is so scared. Ken Blatt was removed with issues that are petty compared to what these guys did. Maybe more officials are involved and fear any type of action. Maybe start another TV program called Reservation Greed.

DonnieSue writes:

The dismissal of the other counts is outrageous! He should be made to face all the charges but you know he will get a slap on his hands and will move on to commit another crime. We all knew this was going nowhere, Now who is Councilman A pray tell, they should be charged as well, There is so much money loss that it will never be recovered. So much for justice.

 
 
 
 
 
Rendered 11/06/2014 21:46