Former Blackfeet Tribal Chairman Sentenced To Prison In U.S. District Court

The United States Attorney's Office announced that during a federal court session in Great Falls, on October 21, 2013, before Chief U.S. District Judge Dana L. Christensen, PATRICK CHARLES THOMAS, a 55-year-old resident of Cut Bank, was sentenced to a term of:

* Prison: 12 months, and 1 day

* Special Assessment: $100

* Restitution: $162,865.36

* Supervised Release: 3 years

THOMAS was sentenced in connection with his guilty plea to unlawful conversion of property he had pledged as security to obtain a series of loans from the Farm Services Agency. An agricultural borrower gives the FSA an interest in their livestock and crops, as well as identified pieces of property and equipment, to insure that the loan is secure and will not be left unpaid. It is illegal to dispose of that property without involving the FSA or providing the FSA with the proceeds of any sale.

THOMAS, a lifelong resident of the Blackfeet Reservation, served on the Blackfeet Tribal Business Council, the governing body of the Blackfeet Tribe, from 2004 to 2008; first in the position of Vice Chairman and then as Chairman.

In an Offer of Proof filed by Assistant U.S. Attorney Carl E. Rostad, the government stated it would have proved at trial the following:

THOMAS was a rancher/farmer near Cut Bank who obtained, over the years, numerous loans from the U.S. Department of Agriculture, Farm Services Agency (FSA). As part of that lending and borrowing relationship, THOMAS pledged as collateral all livestock, crops, and personal property.

Beginning in or before June of 2006, THOMAS began to sell off hay, grass (grazing), cattle, equipment, and other pledged assets without notifying the FSA of the transactions or the income generated from the sale of those assets.

On December 18, 2008, THOMAS submitted a balance sheet to support his application for financing through FSA showing he had 225 bred cows which would be used as collateral. The FSA had concerns regarding the actual number of cows. They had not been able to get an actual count of the cattle for some time and, when chattel inspections had been completed, it did not appear that there were as many cattle as they thought should be there. FSA conducted a count December 29, 2008, and located 169 head. When questioned about the discrepancy and the missing 59 head of cows, THOMAS stated they had gone down into Flat Coulee on his neighbor's place and he couldn't get them up.

On March 2, 2009, THOMAS was approved for a $65,000 annual operating loan from FSA which also rescheduled THOMAS's existing FSA loans. The projections used were based, in material part, on the cow numbers shown on the Security Agreement dated December 19, 2008, which showed 225 head of cows and 11 bulls.

On March 31, 2009, FSA performed an inspection and recorded approximately 180 head of cows. Later that year, in October 2009, without notifying or receiving the approval of the FSA, THOMAS sold 105 calves to a Nebraska-based cattle buyer without disclosing to the buyer that the calves were pledged as security to the FSA. THOMAS concealed the sale from the FSA and converted the proceeds - $49,776 - to his own use and benefit.

On February 22, 2010, FSA went to THOMAS's ranch to do a chattel inspection and cattle count for both the Farm Loan Program and for THOMAS's daughter's 2009 LIP claim. FSA counted 99 cows and 3 yearlings, of which 62 were THOMAS's and 6 of which belonged to his daughter. FSA representatives could not read the brand on the remaining 33 head.

On April 22, 2010, FSA and representatives of the Montana Department of Livestock went to THOMAS's ranch to count the cattle. The final tally that day was 81 head of cows, of which 70 had THOMAS's brand, and 11 had other family member's brands. There were also 53 head of unbranded calves. The numbers were significantly less than what FSA had collateralized - or believed to have collateralized on the basis of THOMAS's representations. These events prompted FSA to turn the case over to the Department of Agriculture's Office of Inspector General for criminal investigation. The subsequent investigation established that between June 11, 2006, and July 13, 2011, THOMAS disposed of and sold at least $162,865.36 in cattle, hay, equipment and other property he had pledged as a collateral to obtain FSA loans, and in which the FSA had a security interest, without the knowledge or approval of the FSA. Agent Monique Hirko-Damuth testified at THOMAS's sentencing hearing that she obtained the defendant's bank records and examined all deposits. On numerous checks the memo section identified the property purchased from THOMAS. She then compared the property sales to the list of pledged assets to determine the amount of secured property that THOMAS had sold without the approval of the FSA and which had not gone to satisfy THOMAS's indebtedness to the agency.

U.S. Attorney Mike Cotter called Judge Christensen's sentence "a sentence that promotes respect for the law. It warns those who endeavor to cheat a federal loan program --- a program that provides producers with financial opportunity and the tools to succeed in Montana's agricultural industry --- that their conduct will not go unnoticed or ignored. The integrity of FSA's lending program will be preserved and protected. Our response will be vigorous and the consequences of deception will be serious."

Cotter included the THOMAS case in the Guardian's Project even though he describes the case as an "external" attack on federal programs when the primary focus of the effort is on "internal" attacks by public officials. "An important component of the THOMAS prosecution was the allegation contained in the first count of the indictment relating to a fraudulent claim in the Keepseagle settlement". In Keepseagle v. Vilsak, a class action lawsuit was pursued by Native American farmers and ranchers alleging that they had been discriminated against by the U.S. Department of Agriculture (USDA) and that they had been denied equal access to credit in the USDA Farm Loan Program. As a result of that lawsuit, on April 28, 2011, a $760 million settlement with the USDA was approved, and claims were entertained from individual Native American producers who asserted that they had been discriminatorily aggrieved by the USDA in the lending process. "This office determined that the Keepseagle claim was best pursued by a civil false claims action against THOMAS and we anticipate bringing that action in the near future."

Because there is no parole in the federal system, the (truth in sentencing( guidelines mandate that THOMAS will likely serve all of the time imposed by the court. In the federal system, THOMAS does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.