Executive Director Of Tribal Investment Firm Pleads Guilty To Fraud In Federal Court
Defendants Prosecuted as Part of The Guardians Project, a Federal Law Enforcement Initiative to Combat Corruption, Fraud, and Abuse in South Dakota
United States Attorney Randolph J. Seiler announced today that a Fort Thompson, South Dakota, woman pleaded guilty to wire fraud and federal program fraud in federal court in Pierre, South Dakota.
Tally Colombe, 42, pleaded guilty before U.S. District Judge Roberto A. Lange.
Wire Fraud carries a maximum sentence of 20 years in prison, Program Fraud carries a maximum sentence of 10 years in prison. Each count of conviction also carries a possible maximum fine of $250,000, a period of supervised release of 3 years, an assessment of $100, and restitution.
According to plea documents filed with the Court, beginning on or about June 1, 2015, through and including October 1, 2016, in the District of South Dakota and elsewhere, Tally Colombe, having devised a scheme and artifice to defraud by means of false and fraudulent pretenses, representations and promises, caused to be transmitted by means of electronic wire communications in interstate commerce, writings, signs, signals, pictures and sounds for the purpose of executing such scheme and artifice to defraud.
It was part of the scheme and artifice to defraud that the defendant, while serving as the Executive Director of Hunkpati Investments, used a debit card belonging to Hunkpati Investments to make personal purchases from several businesses, all without knowledge and authorization from Hunkpati Investments.
Beginning on or about June 1, 2015, through and including October 1, 2016, Colombe, as an agent of Hunkpati Investments, which was an organization and agency that received in each of the calendar years of 2015 and 2016 benefits in excess of $10,000 under a federal program involving a grant, contract, subsidy, loan, guarantee, insurance, and other form of federal assistance, did knowingly and intentionally embezzle, steal, obtain by fraud, and otherwise without authority knowingly convert to the use of persons other than the rightful owner, and intentionally misapply property worth at least $5,000 which was owned by and was under the care, custody and control of Hunkpati Investments.
Hunkpati Investments (Hunkpati), located in Fort Thompson, South Dakota, is a Native Community Development Financial Institution established to provide financial opportunities to stimulate economic development on the Crow Creek Sioux Reservation. Hunkpati services include a savings incentive program and lending for credit builder and small business loans. Hunkpati is funded by grants from the U.S. Department of Treasury, the U.S. Department of Agriculture, the U.S. Department of Health and Human Services, the Northwest Area Foundation, and several other small foundations. In 2015, Hunkpati received in excess of $30,000 in grants from federal agencies.
Hunkpati is governed by a Board of Directors (Board). Defendant served as an agent, that is, Executive Director, of Hunkpati from May of 2015, to approximately November of 2016, and reported to the Board. Prior to becoming the Executive Director, Defendant also served on the Board as a Board Member. As Executive Director, Defendant was responsible for advising the Board on the financial status of Hunkpati as well as maintaining compliance for Hunkpati’s spending pursuant to the federal grant requirements.
The unlawful purchases, and therefore the wire transfers, were made without authorization from the Board. Defendant did not disclose the purchases to the Board. The amount of identified suspicious expenditures and embezzled funds totals at least $15,001. The amount of embezzled funds could be as high as approximately $90,912.04.
The investigation is being conducted by the Federal Bureau of Investigation and the United States Attorney’s Office. Assistant U.S. Attorney Ann M. Hoffman is prosecuting the case.
The case was brought pursuant to The Guardians Project, a federal law enforcement initiative to coordinate efforts between participating agencies, to promote citizen disclosure of public corruption, fraud, and embezzlement involving federal program funds, contracts, and grants, and to hold accountable those who are responsible for adversely affecting those living in South Dakota’s Indian country communities. The Guardians Project is another step of federal law enforcement’s on-going efforts to increase engagement, coordination, and positive action on behalf of tribal communities. Led by the United States Attorney’s Office, the participating agencies include: Federal Bureau of Investigation; the Offices of Inspector General for the Departments of Interior, Health and Human Services, Social Security Administration, Agriculture, Transportation, Education, Justice, and Housing and Urban Development; Internal Revenue Service, Criminal Investigation Division; U.S. Postal Inspector Service; U.S. Postal Service, Office of Inspector General.
For additional information about The Guardians Project, please contact the United States Attorney’s Office at (605)330-4400. To report a suspected crime, please contact law enforcement at the federal agency’s locally listed telephone number.