A sign on the Paskenta Nomlaki Reservation in California. Photo: Paskenta Band of Nomlaki Indians

'Vindication and justice': Paskenta Band hails guilty pleas in major theft case

Three members of a family that controlled the Paskenta Band of Nomlaki Indians for more than a decade have admitted to stealing nearly $5 million from their tribe, closing one chapter in a long-running saga that generated headlines across the country and reached all the way to the nation's capital.

Leslie Lohse, the tribe's former treasurer, her sister, Ines Crosby, and Crosby's son, John Crosby, pleaded guilty to a conspiracy to embezzle or steal from the California-based tribe, the U.S. Attorney's Office announced on Thursday. All three defendants also admitted to tax fraud charges as part of a scheme that cost the tribe and the American public more than $6.5 million, according to federal authorities.

“The defendants used the tribe’s accounts as their personal piggy banks,” said Kareem Carter, Special Agent in Charge, IRS Criminal Investigation. “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.”

Chairman Andrew Alejandre welcomed the announcement, which resolves criminal charges announced in January 2017. He said the defendants, who are part of a family that once held positions of power on the reservation, caused long-lasting damage to his people.

"These guilty pleas represent an important step towards vindication and justice for tribe members," Alejandre said. "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."

This Cessna 560 jet was once registered to Paskenta Enterprises Corp., the economic development arm of the Paskenta Band of Nomlaki Indians, according to Flight Aware. It was purchased with tribal funds, according to a civil lawsuit pending in federal court. It has since been sold by the tribe. Photo: Paskenta Band

With sentencing scheduled for January 30, 2020, the tribe and its citizens will be watching the next developments closely. As he thanked federal authorities for securing justice in the case, Alejandre believes all three defendants should be sent to prison for their crimes.

"The tribe appreciates the important assistance that the U.S. Attorneys Office, the FBI, and the IRS have provided in rebuilding that trust," Alejandre said. "These agencies’ successful prosecution of these individuals and their close work with the tribe in the process represent the best of inter-government cooperation."

“The tribe has worked hard, for the last five years, to build an open, democratic, and representative tribal government that works for the benefit of all members," Alejandre added. "Sending these former officials to jail for their corruption significantly assists in that process.”

But while the criminal case is coming to a close, the Paskenta people have another matter to deal with, one they are pursuing on their own. Much like the federal complaint, the pending civil lawsuit accuses the once prominent family of using their leadership positions to steal millions of dollars from the tribe.

Stuart G. Gross, an attorney representing the tribe, said the civil case has been on hold all this time while federal prosecutors took care of the criminal charges. He noted that three of the defendants are the same ones who just admitted to wrongdoing in connection with their reign of power.

"Under oath they admitted to doing what the the tribe alleges they did in the civil case," Gross told Indianz.Com on Thursday afternoon after attending the federal court hearing in which the three defendants pleaded guilty. "That's obviously extremely strong evidence in favor of the tribe's case against them."

The defendants in the civil case include Lohse, who was a nationally-recognized and widely known leader in Indian Country before her downfall, and her husband Larry. Also named are sister Ines, who served as the tribe's administrator, and nephew John, who was the director of economic development on the reservation.

Several more members of the same family are accused as well. The group includes Chris Pata, the former manager of information technology at the Rolling Hills Casino, the tribe's successful gaming facility in Corning, California. He is Lohse's and Crosby's brother.

"It's what you could term a family affair," Gross said of the siblings, relatives and at least one spouse accused of using their positions of authority to their personal and financial advantage.

The spoils allegedly include luxury homes, more than 160 ounces of gold and a $3 million jet that was supposedly used to fly the family around the country, including to professional baseball games. Lohse's son was one of the few Native Americans who played for the major leagues up until his retirement last year.

Leaders of the Paskenta Band of Nomlaki Indians admire a highway sign bearing the tribe's name prior to the installation along Interstate 5 in northern California. Photo: Paskenta Band

After the allegations of corruption came to light, the tribe fired Pata but that didn't prevent him from gaining employment with the National Congress of American Indians in Washington, D.C., where his wife, Jackie Pata, served in a powerful role as the executive director of the largest and oldest inter-tribal advocacy organization in the U.S.

At the Embassy of Tribal Nations in the capital, Chris Pata handled information technology for NCAI much like he did back in California. And while he has never been charged with a crime, former employees told Indianz.Com they were uncomfortable that the person in charge of their computer system was being accused by his own people of wrongdoing and was married to the person who played a key role in their professional lives.

"Would my bosses husband steal from me?" one former employee told Indianz.Com. "That's not a question people should have to ask themselves."

"I feel like every new staffer had their moment when they found out Chris had a role in that," this same former employee said, referring to the allegations of in the tribe's lawsuit, which is based on the Racketeer Influenced and Corrupt Organization Act, a federal law used to target groups accused of corrupt activity.

NCAI staffers usually discovered the connection by finding the RICO complaint on Turtle Talk, the widely read Indian law and policy website, the former employee said.

As the tribe was attempting to gain a handle on the situation, a new slate of leaders suspended Pata and his siblings, before eventually disenrolling them. Amid the drama, Jackie Pata took up her husband's cause by contacting the Obama administration, where the Bureau of Indian Affairs was paying close attention to the turmoil, which turned contentious.

Though Pata denied abusing her position as NCAI's executive director in an attempt to influence the BIA, she was suspended for one week by the organization's board in late April 2014. According to an email seen by Indianz.Com, she blamed the "other sides lawyer" for her predicament.

"But what I did do was prevent violence, killing etc -- by keeping the [Paskenta] council from doing anything but pursing [sic] it legally with the right entities -- and not taking up arms like the other side did," Pata told colleagues at NCAI. "Oh well... life goes on..."

Pata has since resigned her position as NCAI's executive director, a job she held for a record 18 years, after her role in a sexual harassment scandal came to light following an investigation by Indianz.Com. She now serves as president and chief executive officer of the Tlingit-Haida Regional Housing Authority in Juneau, Alaska, overseeing a vast portfolio of millions of dollars that benefit citizens of her tribal nation, the Tlingit and Haida Tribes.

Chris Pata too has left NCAI and has joined his wife in Juneau, according to his social media profile. He is no longer listed as a member of the organization's staff.

NCAI did not immediately respond to a request for comment about Pata's employment placed late in the afternoon.

The organization has since hired Kevin Allis, a citizen of the Forest County Potawatomi Community, to serve as its first Chief Executive Officer. The position was retitled following Jackie Pata's departure.

The criminal case is USA v. Crosby, et al, No. 17-cr-0006. It was filed in the federal court for the Eastern District of California and was scheduled to have gone to trial on September 30 before the plea agreements were reached.

The tribe's civil matter is Paskenta Band of Nomlaki Indians, et al. v. Crosby, et. al, No. 15-cv-0538. It's also pending in the Eastern District -- Gross said he expects the stay in the case to be lifted following the sentencing for the criminal defendants.

"They threw out kleptocratic leaders, put in place a democratic government that is building up and doing amazing things for its members and holding its former kleptocratic leaders responsible," Gross told Indianz.Com of the Paskenta Band's actions in recent years.

"It's a pretty positive story," he said from California.

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