Three former officials of the Paskenta Band of Nomlaki Indians in Northern California have pleaded guilty in federal court to conspiring to embezzle or steal more than $6 million from the tribe—along with tax evasion and tax fraud.
Prosecutors characterized their actions as “a 12-year looting spree.” It was also a spree that kept the money in the family.
The former officials include the former Tribal Economic Development Director, John A. Crosby (a retired FBI agent); his mother, former tribal administrator Ines S. Crosby; and former Tribal Treasurer Leslie A. Lohse, who is Ines Crosby’s sister.
The familial trio were brought to justice by a combined effort of the FBI and the IRS. They are scheduled to be sentenced by a federal judge January 30. They face prison sentences of four to five years and could be forced to pay back millions of dollars to the tribe and to the IRS.
The tribe owns and operates the Rolling Hills Casino in Tehama County, along Interstate 5, about 110 miles north of Sacramento in the town of Corning. It also operates a golf course, hotels, an RV park, an equestrian center and a concert hall. Combined, they generate an estimated $100 million for the tribe.
In a statement, Kareem Carter, special agent in charge of the IRS criminal investigation said, “The defendants used the tribe’s accounts as their personal piggy banks. For at least five years the defendants took more than $4.9 million of the tribe’s money and intentionally failed to declare it as income to the IRS. This resulted in a tax loss of over $1.6 million.”
The unauthorized withdrawals of tribal funds took place between January 2009 and May 2014. The defendants took advantage of their positions on the tribal council to access the money.
Special agent in charge Sean Ragan of the FBI Sacramento Field Office added, “This case sends a clear message that no one is above the law and tribal accounts cannot be used for personal gain, regardless of their perceived influence on the success of tribal business. These individuals diverted millions from tribal accounts—funds intended to help tribal members—for extravagant, unapproved travel and personal luxuries.”
They allegedly used the money to buy homes, cars, and vacations to Africa, South America and Hawaii, along with private chartered jet travel, VIP seats at the World Series and gold and silver, according to the prosecution.
Besides the combined efforts of the FBI and IRS, the federal agents also worked with California and local law enforcement.
However, what brought the malfeasance to light was a split in the tribe over money that forced an audit in 2014. The audit uncovered $17 million in unauthorized expenditures and as much as $93 million spent on risky investments.
The dispute led to an armed encounter between two factions of the tribe outside the casino and a cyberattack that deleted some financial records. All this led to an indictment in 2017. The trio appeared prepared to contest the charges in court when suddenly last week they pleaded guilty.
Besides the federal court actions, the Paskenta Band of Nomlaki Indians has filed a civil lawsuit against the defendants.
The current Tribal Chairman Andrew Alejandre hailed the guilty pleas: “These guilty pleas represent an important step towards vindication and justice for Tribe members.”
He added, “In addition to the millions they stole from the tribe and our most vulnerable members, the actions of these individuals corrupted the tribe’s institutions of government and created distrust that has taken years to restore.”
Alejandre said the tribe has for five years tried to move past the former administration and “to build an open, democratic, and representative tribal government that works for the benefit of all members. Sending these former officials to jail for their corruption significantly assists in that process.”
