Nevada firm, executives agree to pay Chippewa Cree $2.5M

By MATT VOLZ

Associated Press

HELENA — Three executives of Nevada-based consulting firm will pay a Native American tribe in Montana $2.5 million and face possible prison time for their roles in funneling cash from the tribe’s online lending company and kicking back some of the money to tribal officials.

The firm, Encore Services LLC, and the executives, Zachary Roberts, Martin Mazzara and Richard Broome, pleaded guilty earlier this week to wire fraud conspiracy. The firm, represented by Roberts, also pleaded guilty to money laundering conspiracy.

The guilty pleas appear to settle years of civil and criminal litigation in the dispute between Montana’s Chippewa Cree Tribe on Rocky Boy’s Indian Reservation and Encore, which was the tribe’s partner in an attempt to start an online lending company in 2010.

The Chippewa Cree’s venture into online lending started in 2009 with an online payday loan business, with the primary name used PDL Ventures. Questions arose about where the business started, whether it truly was a tribal business or just some company affiliating with the Chippewa Cree Tribe to evade state lending laws. People made complaints about the quality of service as well as the high interest rates of the loan, including claims PDL was charging them for loans they did’t take out.

The tribe created First American Capital Resources LLC in May 2010, with Neal Rosette and Billi Anne Morsette heading the company.

The 2010 company ultimately failed, but the Chippewa Cree started a successful company called Plain Green that makes short-term, high-interest internet loans.

Rosette said at that time the tribe was in the process of dissolving PDL Ventures.

In the tribes online lending started in 2011, Encore claimed to have exclusive partnership rights to all of the tribe’s lending operations, and entered into a “fee agreement” with a tribal leader and a Plain Green official in which Encore would receive 15 percent of the revenues from the new lending company.

Encore received $3.5 million between 2011 and 2013 under the arrangement, which was not known to the rest of the tribe, according to court filings. The Encore executives kicked back $1.2 million of that money to a shell company set up by Morsette and Rosette and a consultant who worked closely with the tribe, prosecutors said.

Morsette and Rosette were sentenced to more than three years in prison in 2016 for stealing from the company and taking bribes. The consultant, James Eastlick Jr., was convicted in a separate corruption scheme involving the tribe, and his plea agreement made him immune from the Plain Green prosecution.

Roberts, Mazzara and Broome will be sentenced Aug. 24. Each faces a maximum penalty of five years in prison and a $250,000 fine. The firm itself could be fined up to $2.9 million at sentencing.

In addition, both sides agreed the tribe is owed $2.5 million in restitution. Of that, $1.1 million was previously ordered in the settlement of a civil lawsuit that the Chippewa Cree tribe had filed against Encore.

The plea agreements in the criminal case call for Roberts and Mazzara to pay the tribe an additional $700,000 each. The money is to be paid in full, or collateral secured, before the sentencing hearing, according to Roberts’ plea agreement.

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Havre Daily News staff contributed to this report.