Shad Huston Sentenced for Corruption on the Rocky Boy's Indian Reservation

GREAT FALLS - The United States Attorney’s Office announced that Shad James Huston, 40, of Havre, Montana, was sentenced on February 29, 2016, before U.S. District Judge Brian M. Morris.  Huston was sentenced to 41 months of prison for Bribery, False Claims Act Conspiracy, and failure to file Currency Transaction Reports as required by law.  In addition, the district court ordered Huston to pay $500,000 in restitution.   

The Chippewa Cree Tribe of the Rocky Boy’s Indian Reservation is located in north-central Montana and has a population of 2,500 members.  Between October 2007 and September 2012, the Chippewa Cree Tribe received $420,439,495 in federal funding.  In addition, the Tribe received a $25,000,000 insurance payment after the flooding of 2010, and $8,400,000 under the Cobell v. Salazar settlement in July of 2012.  The total money received by the Tribe, during this five-year time period, was over $450,000,000.

Huston became associated with a local trucking operation, known as K Bar K Trucking.  While operating the company, Huston engaged in a “pay-to-play” scheme, where he was awarded no-bid, sole-source hauling contracts with the Tribe.  In exchange for the contracts, Huston paid Tim Rosette, Director of the Roads Branch, cash kick-backs of $100 to $200 on a per truck, per trip basis.  The financial records confirm this pattern, showing that Huston companies withdrew approximately $238,000 in cash, in close proximity to contract payments.   When questioned by business partners, Huston explained he would falsely inflate invoices in order to pay bribes to Rosette, and others, in exchange for contracts with the Tribe.  Rosette was previously sentenced to prison in December of 2015.   

In addition to submitting false claims and bribing Tim Rosette, Huston also operated various businesses, including Leon’s Buy and Sell in Havre, Montana.  These businesses were registered as Money Service Businesses with the Financial Crimes Enforcement Network (FinCEN), of the U.S. Department of Treasury.  FinCEN’s mission is to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.  

In order for FinCEN to track money laundering and other fraud, Huston, as a money service business, was required to file Currency Transaction Reports (“CTRs”) when cashing checks for others in excess of $10,000.  Huston cashed checks in excess of $10,000 for Hailey Belcourt, who was previously indicted and convicted for fraud, and other individuals implicated in fraud on the Rocky Boy’s Indian Reservation.  All total, Huston cashed 19 checks that should have been reported, but were not.  This failure to report the transactions was done with the deliberate intent to avoid exposing the transactions to FinCEN.   

Huston’s convictions for corruption and failing to file CTRs is the latest in a series of prosecutions and convictions relating to public corruption, fraud, and theft in federal grants, contracts, and programs brought by the investigators and prosecutors of the U.S. Attorney’s Guardians Project, an anti-corruption strike force created in 2011.  The Huston case was investigated by the Department of Interior Office of Inspector General and the Internal Revenue Service, Criminal Division.