Dolly Diane Crowe Pleads Guilty in U.S. Federal Cour
The United States Attorney's Office announced that during a federal court session in Great Falls on June 22, 2010, before U.S. Magistrate Judge Keith Strong, DOLLY DIANE CROWE, a 45-year-old resident of Poplar, pled guilty to theft from an Indian tribal organization and conspiracy to obstruct a federal audit. Sentencing has been set for October 14, 2010. She is currently released on special conditions.
In an Offer of Proof filed by First Assistant U.S. Attorney Carl E. Rostad, the government stated it would have proved at trial the following:
The Tribal headquarters of the Fort Peck Indian Reservation are located at Fort Peck Agency in Poplar. In the later part of 2008 and the early part of 2009, Tribal officials retained the services of a certified public accountant to conduct a review of the Credit Program's finances in anticipation of a year-end audit. The accountant quickly identified the excessive loans and discovered that the Credit Program employees and some of their relatives had excessive outstanding short term loans, suggesting that tribal monies had been embezzled, misapplied, or converted to the use of tribal and federal employees of the loan program, and their families.
As of June 2009, the total amount of outstanding short term loans was $1,675,088. Approximately 48% of this amount (over $800,000) were loans to Credit Program employees and their families. An investigation by the Department of Interior's Office of Inspector General determined that almost half of all loans were fraudulent.
The Fort Peck Credit Program maintains three separate bank accounts. These bank accounts are dedicated to the Short Term Loan account, the Revolving Credit Fund account and the Entrepreneurial Loan account.
Prior to the transition of oversight authority in December 2008, the Fort Peck Credit Program was staffed with six employees consisting of two federal employees and four subordinate tribal employees. Loan applications were reviewed by a three member Credit Committee who had authority to approve or deny the application pursuant to the Plan of Operations.
From August 12, 1999, to May 29, 2009, hundreds of fraudulent checks exceeding
Fort Peck Tribal Credit Department to a maximum of $2,000, to qualifying tribal members. The checks were the consequence of a fraudulent scheme whereby all six of the Credit Program employees conspired to steal money from the Tribal Credit Department by securing unauthorized loans and direct payments for themselves. These disbursements purport to represent legitimate loans, overtime payments, and miscellaneous reimbursements to the employees when, in fact, the employees had far exceeded the maximum loan amount threshold of $2,000 and their salary was paid separately through the Tribe's Payroll account. In many cases, the employees circumvented the approval authority of the oversight board - the Credit Committee - by falsely representing that approval for the disbursement had been obtained. To further solidify their conspiracy, the employees often split the proceeds of the checks with each other.
The Tribal Credit Program initially operated with $1.5 million provided to them by the Department of the Interior through the U.S. Direct Loan Fund. The Direct Loan Fund was created to promote access to capital and increase economic opportunity of American Indians. The Direct Loan created and funded the tribal re-lending program, whereby loans repaid by tribal members would be used to repay the Direct Loan and ultimately create a reserve sufficient to make the Credit Program a viable operation. The Credit Program repaid their U.S. Direct Loan in 1996, and the funds in their account since that time are tribal monies.
During the period of the Indictment, CROWE was an employee of the Fort Peck Tribal Credit Department, including service as the Short Term Loan Clerk. She began her employment at the Credit Program in October 1995 as a clerk/typist. At the time of her dismissal in July 2009, she was responsible for preparing and processing short term loan applications.
Four employees had check signing authority on the Credit Program bank accounts - Toni Greybull (former Supervisory Credit Manager who passed away in March 2008), co-defendants S.P., P.B. and E.R.B., as did the three members of the Credit Committee. On some occasions loan applications were completed. In most cases, no loan documents could be located to support the disbursements to these employees. The conspiracy further evolved to include the issuance of loan checks to family members of the Credit Program employees, including their husbands, siblings and children.
The total dollar amount loss attributable to CROWE is $166,820. In that regard, the investigation identified 148 disbursements from the Credit Program checking accounts payable to her between May 2005 and May 2009 that total $138,588. Most of these payments were recorded as short term loans purportedly issued in her name (128 short term loans/$133,673). Twenty disbursements ($4,915) were recorded as miscellaneous expenses, and purport to represent bonuses, accounts receivable disbursements and overtime payments, although the investigation determined that no W-2 was ever issued to CROWE, nor were any of the standard deductions withheld from these payments. CROWE obtained an additional $28,232 from the Credit Program by fraudulently recording these payments as short term loans to her mother and sister.
The scheme was in danger of discovery in September 2007 when the BIA conducted a program review of this Tribal Credit Program. Two federal employees - the BIA Regional Credit Officer and another BIA employee - (the review team) - were assigned to conduct the program review amidst complaints by the Tribal Chairman that the BIA Agency officials refused to disclose information concerning loan recipients to the Tribal Executive Board. The review team met with Greybull, S.P. and P.B. during their review. Altered records were provided to the BIA review team which concealed both long term and short term loans obtained by the Credit Program staff. By switching the loan account names, the Credit Program employees were able to reduce the outstanding short term loan balance by $550,000 and thereby concealing their thefts. In addition, the review team was provided with an altered list of long term loans which omitted $112,659 in long term loans obtained by the staff and/or their family members. When interviewed, the employees admitted that immediately prior to this internal review they changed the names on their loan files to conceal the short term loans they had issued themselves. The employee names were replaced with the names of deceased tribal members to prevent the discovery of the excessive disbursements during the federal review.
In December 2008, federal oversight of the Tribal Credit Program was discontinued and the two federal employees were reassigned. The audit referred to above was conducted and led to the federal investigation by the Office of Inspector General. Both the auditor and the federal investigators found that collection action on the outstanding loans was nearly non-existent. In some instances, loan files contained no accompanying/supporting documentation denoting approval for the issuance of the loan or details on the repayments terms of the loan.
In July 2009, the four tribal employees were interviewed by the Tribe's Chief Financial Officer. All four employees admitted to stealing funds from the Credit Program and the matter was referred to law enforcement for a criminal investigation. The four tribal employees, as well as federal employee P.B., admitted to investigators their participation in the fraud scheme and further identified the disbursements to which they were not entitled to receive. The investigation determined that S.P. was a co-signer for the issuance of dozens of short term loans and miscellaneous checks made payable to her five subordinate employees, and their family members between April 2005 and August 2007. The total of these checks exceed $129,138.
CROWE faces possible penalties of 5 years in prison, a $250,000 fine and at least 3 years supervised release on each charge.
The investigation was conducted by the Inspector General's Office for the U.S. Department of Interior.
A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.