Indian Affairs Official Still Guilty in Loan Scam

     (CN) – A former Bureau of Indian Affairs officer lied about her supervisor’s decades-long scam in exchange for a favorable loan modification, the 9th Circuit ruled.
     Florence White Eagle, the former superintendent of the Fort Peck Indian Reservation in northeastern Montana, had been charged in relation to a government-loan scam allegedly run since the early 1990s by the late Toni Greybull, a BIA administrator who died in 2008, and others.
     Through the scam, employees tasked with administering a government credit program on the reservation “obtained loans by filing applications in the names of ‘nominee,’ or stand-in, relatives and then splitting the proceeds amongst themselves,” according to the ruling published Friday.
     An audit of the program found that some $1.2 million of the approximately $1.6 million that the credit program loaned “went to credit program employees and their stand-in family members.”
     White Eagle allegedly obtained a fast-tracked $15,000 loan modification on favorable terms after she wrote a cover-up letter full of lies to Greybull’s mother, Patricia Menz, who had recently discovered her name on some of the fraudulent loans.
     A jury sentenced White Eagle to four years in prison for bribery, misprision of a felony and other charges, but the 9th Circuit reversed four of her six convictions on Friday and remanded the case for a new sentence.
     While agreeing that White Eagle had “turned a blind eye to fraud and facilitated its cover up,” the Portland-based appellate panel found little evidence to sustain her convictions for conspiracy to convert tribal credit program proceeds, theft and conversion from an Indian Tribal Organization, concealment of public corruption, and public acts affecting a personal financial interest.
     “The government presented no evidence that White Eagle defrauded the credit program or that the applications for her long-term loan and subsequent modifications were inaccurate or incomplete,” Judge M. Margaret McKeown wrote for a three-judge panel. “Unlike core participants in the nominee borrower scheme, White Eagle did not use nominee borrowers to surreptitiously gain a personal benefit.”
     McKeown agreed with the jury, however, that White Eagle had failed to report the fraud and had helped to conceal it by lying to Menz and attempting to hide it after Greybull’s death.
     “Upon hearing of Menz’s concerns, White Eagle conducted almost no investigation into whether Menz’s loans were actually paid, and did not report the issue to her superior,” McKeown wrote. “Instead, on December 12, 2007, she wrote a letter to Menz on BIA letterhead falsely assuring her that the loans had been paid off and that they had only erroneously been listed under Menz’s name. Only one day earlier, White Eagle had applied for the $15,000 loan modification. The modification appears to have issued on irregular and favorable terms.
     As such, the court affirmed White Eagle’s bribery and misprision of a felony convictions.

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