Donald Louie Clayborn Sentenced in U.S. District Cour
Bill Mercer, United States Attorney for the District of Montana, announced today that during a federal court session in Missoula, on January 9, 2009, before U.S. District Judge Donald W. Molloy, DONALD LOUIE CLAYBORN, a 58-year-old resident of Helena, appeared for sentencing. CLAYBORN was sentenced to a term of:
- Home Arrest: 6 months with electronic monitoring
- Special Assessment: $100
- Restitution: $35,303.32
- Supervised Release: 5 years
CLAYBORN was sentenced in connection with his guilty plea to theft from an organization receiving federal funding.
In an Offer of Proof filed by the United States, the government stated it would have proved at trial the following:
CLAYBORN served as Helena Indian Alliance Executive Director from July of 2003 until his resignation which occurred sometime during February of 2007.
The Helena Indian Alliance (HIA) is a Montana Indian non-profit organization established to develop, implement, and maintain cultural, social, and economic programs for families, seniors, and youth.
Prior to official travel, HIA staff are required to complete a travel request form for an advance of funds, which is then approved by the Executive Director. The advance of funds covers meals, lodging, and any incidental expenses. Upon the Executive Director's approval, a staff member then prepares a check in the name of the traveler representing the anticipated travel costs.
Upon returning from travel, HIA staff submit their receipts so that they can be reconciled with the travel claim to determine any monies that were owed to them or that they needed to repay to the HIA. HIA required HIA staff to submit receipts for lodging but not for meals.
In or around October of 2004, CLAYBORN told the HIA accountant that he wanted to start handling his own travel since the HIA policy was cumbersome. CLAYBORN said that when he had worked for the State of Montana, he had a $1,500 revolving travel advance. At the conclusion of their conversation, CLAYBORN advised that he would take travel advances as needed without going through the official HIA protocol. Since CLAYBORN would not be requesting his travel advances through a staff member, the accountant inputted CLAYBORN'S travel advance checks into a computer program called Quick Books. CLAYBORN was advised that he needed to maintain support, such as lodging, meals, and expense receipts for his travel.
Since the HIA receives almost all of its funding through federal sources, it is required to have an independent audit periodically conducted on the books and records of the non-profit. The Fiscal Year 2005 audit reviewed sixty-five travel checks for testing. The auditor noted, among other things, that all of his own travel checks were signed and authorized by CLAYBORN. The audit also discovered that support for the executive director's meals while on travel to various cities were supported by a series of sequentially numbered meal receipts which appeared to be falsified. Additionally, all travel requests were split into multiple checks at or below the $500 threshold (which appeared designed to circumvent a dual signature requirement that applies to checks over that amount), that requires only the executive director's signature and approval.
CLAYBORN'S administrative assistant advised that shortly after receiving the draft 2005 audit report by mail, CLAYBORN told her not to tell anybody that she had received it. CLAYBORN did not say why he didn't want anyone to see it, but the assistant believed his decision had to do with the audit results which questioned CLAYBORN'S travel expenses.
On February 21, 2007, CLAYBORN contacted the treasurer of the HIA and requested a meeting with him and the HIA Board regarding the 2005 audit. On that day, HIA's treasurer and accountant, CLAYBORN, and HIA Board members met to discuss the 2005 audit findings. It was at that meeting that the Board learned that the audit report noted that travel expenses were not properly supported and appeared to be falsified. The treasurer recalled learning sometime shortly after the HIA Board meeting, on February 21, 2007, that the draft 2005 audit report that CLAYBORN had provided to the Board at that meeting was missing several pages. Brown advised that the pages had to do with whether corrective action had been taken regarding the 2004 audit findings. With regard to the 2004 audit report, HIA was convinced that CLAYBORN also withheld that report as well, as CLAYBORN had received it during November of 2006 but had not provided it to the HIA Board until February 14, 2007.
During the period of October 2004 through February 2007, CLAYBORN received $53,932 for business related travel. The FBI reviewed these payments, noting that numerous checks were below the $500 threshold. For instance, during the period of May 9, 2005, through September 19, 2005, CLAYBORN generated 38 checks either for $490 or $495 payable to himself. In the same time period, he only generated 6 checks for lesser amounts. Additionally, between October 5, 2005, and February 21, 2006, CLAYBORN generated another 23 checks. Of these, 15 of them were for $490.
Forensic reviews of the records of the HIA and CLAYBORN'S bank records revealed several instances of apparent embezzlement:
On numerous occasions, CLAYBORN submitted more than one travel request covering the same travel days but for travel to different cities. As an example, CLAYBORN submitted three separate travel requests, each totaling $490, for travel which was to occur on October 5 through 10. One of the travel requests showed travel to Billings, Butte, Great Falls, and Missoula. The second request showed travel to Bozeman and the third request showed travel to Billings, Butte, and Great Falls. In another instance, CLAYBORN submitted three separate travel requests each totaling $490, for travel which was to occur on August 5 through 12. One of the travel requests showed travel to Billings, and Fairmont. The second request showed travel to Billings, and the third travel request showed travel to Butte, Great Falls and Missoula.
During the period of July 2003 through February 2007 (CLAYBORN'S tenure at HIA), CLAYBORN wrote hundreds of checks to cash (drawn on his personal account at Mountain West Bank), at local Helena casinos/bars totaling close to $300,000. Further review revealed many checks written on days which, according to the travel requests, CLAYBORN was in Billings on travel status.
One staff member recalled a trip during September of 2005 in which CLAYBORN was to travel to Milwaukee, Wisconsin for a conference. At CLAYBORN'S request, the staff member attended the conference in his place, leaving Helena on a Thursday and returning the following Monday. The trip cost around $1,000. Although the staff member was reimbursed by HIA for the cost of the trip, CLAYBORN wrote at least one check to himself reflecting reimbursement for the same trip. The FBI was provided with copies of two checks written to CLAYBORN totaling $490. One of checks contained the words "TRVL NACOH MILW" in the memo section and the other check contained the words "TRVL MILWKE"
During 2006, CLAYBORN called the HIA to advise that he was on his way back from Butte. Approximately one half hour later, the HIA staff member he had spoken to was driving on 11th Avenue in Helena when she observed CLAYBORN driving his white Chevy Caprice station wagon.
On numerous occasions, CLAYBORN telephonically contacted HIA to advise that he would be out of town for the day. CLAYBORN claimed he traveled to the Billings Indian Health Service or one of the other Indian alliance offices in Butte, Great Falls, Missoula, or Billings. CLAYBORN typically returned to the office before 5:00 p.m. on days which he said he would be traveling out of town.
On several occasions, recalled by staff members, CLAYBORN contacted HIA around 11:00 a.m. to advise that he was on his way to Billings. Around 3:00 p.m. on the same day, CLAYBORN contacted the HIA to advise that he was traveling back from Billings. With regard to several trips CLAYBORN alleged to have taken to Billings, he returned to the HIA office before 5:00 p.m. The distance from Helena to Billings is 224 miles and takes approximately 31/2 hours, each way, under optimal conditions.
According to HIA travel records, CLAYBORN obtained travel funds to travel to Billings on HIA business on over 30 occasions between October 18, 2004, and November 26, 2005. By letter dated January 8, 2008, the Billings Indian Health Service (BIHS) provided the results of their review wherein they enclosed copies of the visitor log sheets maintained for their building. Based upon the security logs, with the exception of March 5-18, 2005, for which no records could be located, CLAYBORN did not enter their offices located in the Federal Building at 2900 Fourth Avenue North. CLAYBORN would not have been allowed to enter the building without signing in and presenting proper identification.
The Indian Health Board of Billings (IHBB) advised that approximately three years ago (2004), CLAYBORN may have been in attendance for a meeting at the IHBB. The Executive Director, who has been in that position since 2004, was aware of only this one occasion when CLAYBORN had visited the IHBB.
Interviews at related organizations in other Montana cities registered similar comments and observations. CLAYBORN was rarely recalled as being at their facilities.
During the period of October 2004 through February 2007, CLAYBORN received federal monies totaling $40,881 for business related travel which was not verified or supported by legitimate receipts, and which witness interviews made clear did not likely actually occur.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that CLAYBORN will likely serve all of the time imposed by the court. In the federal system, CLAYBORN does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
Assistant U.S. Attorney Carl E. Rostad prosecuted the case for the United States.
The investigation was conducted by the Federal Bureau of Investigation.