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Justice News

Department of Justice
U.S. Attorney’s Office
District of Montana

Monday, September 16, 2013

Kaylene Shane Red Wolf Pleads Guilty In U.S. Federal Court

The United States Attorney(s Office announced that during a federal court session in Great Falls, on September 12, 2013, before U.S. District Judge Sam E. Haddon, KAYLENE SHANE RED WOLF, a 44-year-old resident of Hardin, pled guilty to theft from local government receiving federal funding. Sentencing has been set for January 1, 2014. She is currently released on special conditions.

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:

The Lodge Grass Public Schools - on the Crow Indian Reservation - operates with approximately $4.5 million in annual federal funding.

RED WOLF was a Payroll Clerk for the Lodge Grass Public Schools (LGPS) from October 2011 to her resignation on September 11, 2012.

In June 2012, RED WOLF executed a double salary scheme whereby she would issue herself a partial pay check even though she also arranged payment to herself through direct deposit for the same hours worked. She doubled her pay for those hours on five separate occasions between June 20, 2012, and August 15, 2012.

Between November 4, 2011, and June 12, 2012, RED WOLF also employed a scheme whereby she wrote other checks for her own benefit. These fraudulent payments involved pay for hours not documented as having been worked and overpayments for holiday pay.

When interviewed about the allegedly illegal payments, RED WOLF admitted that she was not entitled to receive the full 80 hours on her normal payday when she had already advanced herself a portion of those hours between paydays. RED WOLF admitted she was the person that input the payroll hours into the LGPS computer system so the paychecks could be issued to employees, including herself. RED WOLF said she intended to repay the unauthorized funds she received while employed as the Payroll Clerk for the LGPS, but that she had not made any repayments due to other financial difficulties she was experiencing.

When the questioning turned to the other allegedly improper payments, RED WOLF terminated the interview.

The loss to the Lodge Grass Public Schools was $10,002.60, although RED WOLF terminated the interview before some of the questioned payments were discussed. The United States and RED WOLF will endeavor to reach an understanding about the total amount of loss well before sentencing.

RED WOLF faces possible penalties of 10 years in prison, a $250,000 fine and 3 years supervised release.

The investigation was conducted by the U.S. Department of Interior - Office of Inspector General.

Updated January 14, 2015