(CORNING, Calif. – Aug. 14, 2015) A federal judge ruled today that the U.S. District Court, Eastern District of California, has subject matter jurisdiction over a lawsuit filed by the Paskenta Band of Nomlaki Indians under the federal Racketeer Influence and Corruption (RICO) Act and other state and federal laws against former Tribal officials and senior employees accused of defrauding the Tribe of tens of millions of dollars. The court rejected claims by defendants that the Tribe’s lawsuit is an intra-tribal dispute and therefore the Court had no jurisdiction to hear any of the Tribe’s claims.
“We are gratified by the Court’s decision. The Tribe brought this action to hold responsible a group of individuals who, for well over a decade, conspired to steal tens of millions of dollars from the Tribe,” the Paskenta Band of the Nomlaki Indians Tribal Council said in a statement. “That stolen money, much of which the Ringleaders used to pay for a lifestyle of private jet travel, sports cars, and luxury homes, could and should have been used to improve the welfare of the Tribe’s members. The Court’s decision today makes clear that these individuals and others who benefited from their scheme will be held responsible for the harms they caused.”
The Tribe’s co-lead counsel Stuart Gross, of Gross Law P.C., added, “With a single sentence, the Court rejected the argument that this case is an intra-tribal dispute over tribal membership and governance over which the Court lacks jurisdiction. The decision sends a clear message that tribal officials who steal from the tribes they are supposed to serve can and will be held responsible for their actions in federal courts. The defendants misleadingly defended their conspiracy to defraud the Tribe through arguing the federal courts had no power to review actions that violate federal and Tribal law. The opposite is true; and we are pleased the Court rejected defendants' attempt to avoid liability on this basis.”
In another significant win for the Plaintiffs, U.S. District Judge Garland E. Burrell, Jr., also denied the defendants’ attempt to dismiss the Tribe’s restitution claims, including those filed against Abettor Defendants Umpqua Bank and Umpqua Holdings Corp., Cornerstone Community Bank and Cornerstone Community Bancorp, Associated Pension Consultants and Patriot Gold & Silver Exchange, as well as others that allegedly assisted in the theft of Tribal funds. In addition, the Court provided the Tribe with an opportunity to amend its claims against the Abettor Defendants.
“The Court’s decision affirms the Tribe’s ability to pursue claims against all of the twenty-plus named defendants. This includes those who alleged to have directly participated in the RICO conspiracy, as well as those who assisted and benefited from it. To the extent the Court has asked the Tribe to amplify its allegations concerning some of those claims, we intend to do so,” said the Tribe’s co-counsel Andrew M. Purdy of the Joseph Saveri Law Firm, Inc.
In March 2015, the Tribe filed the lawsuit in federal court charging its former treasurer and three former senior officials with defrauding the Tribe of tens of millions of dollars in Tribal moneys. . The 200-plus page complaint alleges in detail that these four individuals used vote-rigging, bribery, and extortion to take control of the Tribe and its principal non-casino business entity during this far-reaching, decade-long scheme.
Also named in the lawsuit are individuals, including several family members of the four defendants, and businesses that participated in the conspiracy and/or aided and abetted the illegal activity. These include Umpqua Bank, Umpqua Holdings Corp., Cornerstone Community Bank, and Cornerstone Community Bancorp—all of which allegedly assisted the Ringleaders in their theft of Tribal moneys on deposit—as well as Garth Moore Insurance & Financial Services, Associated Pension Consultants, Inc., Haness & Associates, LLC, and their principals, who are alleged to have facilitated conversion of millions of dollars through unauthorized retirement compensation schemes. Additionally, Patriot Gold & Silver Exchange and its owner, Norman R. Ryan, are alleged to have substantially assisted defendant John Crosby in converting approximately $160,000 of the Tribe’s money through purchases of gold.
For more information about the lawsuit, Paskenta Band of Nomlaki Indians and Paskenta Enterprises Corporation v. Ines Crosby, John Crosby, Leslie Lohse, Larry Lohse et. al, contact Stuart G. Gross, of Gross Law P.C., at (415) 671-4628, or Andrew M. Purdy of the Joseph Saveri Law Firm, Inc., at (415) 500-6800.