The St. Croix Chippewa Indians Tribe is being fined $5.5 million after the National Indian Gaming Commission (NIGC) for embezzling $1.5 million of gaming revenue.
NIGC Chairman Jonodev O. Chaudhuri released his report this week which outlines how the tribe embezzled the funds and how no one attempted to correct the violations.
“The misuse of gaming revenue resulted in a considerable economic loss to the Tribe,” Chaudhuri stated. “Money that could and should have been used to fund governmental and tribal programs was diverted away from the Tribe to fill the pockets of a few individuals.”
Chaudhuri continues to explain that these programs that were not funded “are now facing ‘dire financial crisis.’”
Last month the National Indian Gaming Commission NIGC sent the St. Croix Chippewa Indians a notice of violation. The notice outlined over 500 alleged violations and misusing $1.5 million.
Alleged violations date back to 2014 and accuse tribal elder Elmer “Jay” Emery, chairman Lewis Taylor and other members of misusing tribal gaming revenue.
The notice was signed by NIGB Chairman Jonodev O. Chaudhuri. It alleges between 2014-2017 Taylor received 75 payments totaling $154,173 and 94 payments to Emery totaling $235,888.
According to the notice of violation, the Tribe was facing a maximum fine of over $27 million.
“I do not relish the imposition of a find on a Tribe purportedly facing a financial crisis,” Chaudhuri said. “Yet, in the absence of action by Tribal leaders whose actions led to the NOV (notice of violation) at issue here, this is the result Congress prescribed.”
The report continues to explain the total fine amount will be $5.5 million “for misuse of revenues and failure to audit contracts for gaming goods and services exceeding $25,000 per fiscal year.”
Chaudhuri outlines the fines and begins with $1.5 million for payments made to Tribal Council Member Elmer “Jay” Emery and his associated company Rez Connections. Next is a $1 million fine for payments to Jeff Taylor and Kate Wolfe Taylor of the Tribal Gaming Commission.
Another $1 million fine for payments to Tribal Chairman Lewis Taylor, Tribal Council Member Crystal Peterson, and former Tribal Council Members Carmen Bugg and Stuart Bearhart. Then a $1.5 million fine assessed for payments to consultant Lawrence Larson.
Lastly, a total of $500,000 fine has been assessed “for all other violations of misuse of revenues and failure to audit contracts greater than $25,000.”
Chaudhuri writes about a number of factors that led to this decision including economic benefit of noncompliance with NIGC regulations, seriousness of violations, negligence or willfulness and good faith.
“In short, the Tribe has not demonstrated good faith,” Chaudhuri concludes.
“Most damaging is the complicity of those who were supposed to be regulating the gaming operation and protecting its assets,” Chaudhuri writes in the ‘seriousness’ section. “One of the reasons that Tribal Gaming has grown into a 32-billion-dollar industry is that it has rightly cultivated a reputation as a well-run, well-regulated industry. It instills trust in the gaming public.”
Chaudhuri also touched on what this means to the public.
“It sends a message to the industry and provides detractors with arguments that Tribal regulators cannot be trusted – that Indian gaming is not regulated.”
Michael Decorah, Senior Intergovernmental Affairs Liaison for the St. Croix Chippewa Indians of Wisconsin was not available for comment. The Tribe will be able to appeal the fines.