Six additional sentences were handed down in a $1.5 million Ute Mountain Ute Tribe embezzlement case that previously resulted in 16 convictions.
A three-year investigation by the U.S. Department of Justice began in 2015 after a tip about fraud in the tribe’s finance department.
According to court records, from at least 2011 through October 2015, certain employees of the tribe’s Financial Services Department generated fraudulent checks drawn from individual tribal member benefit accounts without their knowledge.
Those sentenced this week as part of the case include:
Gloria Lee, aka Gloria Rouillard and Gloria Lopez, was sentenced to 26 months in federal prison, followed by three years of supervised release, and was ordered to pay $1.14 million in restitution. The large restitution combines the amount of funds she and other defendants who pleaded guilty obtained, court officials said. The guilty defendants are liable for their own restitution, but if not all of it is paid, Lee also is liable because of her pivotal role in the scam, according to a plea agreement.Oraleigh Jaramillo, aka Oraleigh Hammond, was sentenced to 14 months in federal prison and three years of supervised release, and ordered to pay $309,537 in restitution.Shirley Ann Deer was sentenced to 15 months in federal prison and three years of supervised release, and ordered to pay $209,552 in restitution.Terry Jason Arnold was sentenced to 12 months and a day in federal prison and three years of supervised release, and ordered to pay $140,235 in restitution.Classia Rose Hammond was sentenced to three months in federal prison and three months of home confinement, and ordered to pay $65,508 in restitution.Terry Lynn Whiteman was sentenced to three months in federal prison followed by three months of home confinement, and ordered to pay $44,214 in restitution.Those previously sentenced in the case include Maurice Nat, 41 months in prison and $136,575 restitution; Kevin Ryan Lee, five months in prison and $89,132 restitution; Leslie Rouillard, five months in prison and $83,796 restitution; Freana Bancroft, four months in prison and $109,820 restitution; Jennifer Ann Pioche, four months in prison and $106,497 restitution; Colindra House, three months in prison and $52,401 restitution; Loia K. House, three years of probation and $22,190 restitution; Myreon Lehi, three years of probation and $23,280 restitution; and Ladleda Lopez, aka Ladelda Box, three years of probation and $34,823 restitution.
“The FBI aggressively investigates crimes that occur against Native American tribes. The sentencing of the defendants in the Ute Mountain Ute Tribe investigation should send a strong message to anyone considering engaging in white collar fraud schemes,” said FBI Denver Special Agent Dean Phillips.
As part of the scam, the checks were made out to people selected by the employees, then the people receiving the checks cashed them and shared the proceeds with the Financial Services Department employee who provided the check, court records show.
Initially, these fraudulent checks were falsely attributed to the utility benefits or family plan accounts of tribal members who did not request or receive the fraudulent checks. Later, the fraudulent checks were generated without being attributed to any tribal member.
At least five of the people who received the fraudulent checks were not tribal members and were not entitled to any tribal benefits. Six of the defendants sentenced to date were employees in the tribe’s Financial Services Department.
In other instances, the Financial Service Department employees caused embezzled tribal funds to be sent via Western Union to selected recipients who would in turn provide a portion of the money back to the employee who sent the wire. Defendant Oraleigh Jaramillo also caused embezzled tribal funds to be wired to inmates with the Federal Bureau of Prisons who were not Ute Mountain tribal members and not entitled to any tribal funds. Of these defendants, 11 were Ute Mountain Ute tribal members; five were not.
The money was stolen from accounts earmarked to assist individual tribal members with utility expenses, and from family plan accounts established when tribal members were children. When members turned 18, they could access the funds from the family plan accounts, which typically had reached approximately $10,000 with accrued interest. The money could be used to purchase items such as vehicles, home furnishings and computers.
Tribal officials reported that employees involved in the scam have been fired, those who have pleaded guilty in the case have been denied tribal benefits.
“This was a complex case with many defendants and a large amount of money,” said U.S. Attorney Jason Dunn. “But we in federal law enforcement have a sacred trust with members of the tribal community and we take that delegation seriously. Where public corruption exists within the tribes, we will work tirelessly to root it out and to hold accountable those responsible.”
The investigation began in October of 2015 and is expected to conclude soon. The FBI and IRS conducted the investigation which was prosecuted by Assistant U.S. Attorney Pegeen Rhyne.