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Tribal Factions Fight Over Casino Millions

MODESTO, Calif. (CN) - Troubles mount for the Picayune Rancheria of Chukchansi Indians, as a controlling faction took a local bank to court to try to wrest millions in casino revenue from other factions.

The tribe sued Tri Counties Bank and its Modesto branch manager Jessica Parson in Stanislaus County Superior Court, seeking injunctive and declaratory relief and a temporary restraining order to keep the money in the bank - for now.

At the heart of the dispute is the lucrative Chukchansi Gold Casino and Resort, in the Madera County town of Coarsegold between Fresno and Yosemite National Park. The casino opened in 2003 and boasts 56,000 square feet of gaming space and 400 hotel rooms.

Bad blood within the tribe goes back long before the casino. A federal class action restored the Picayune Rancheria's tribal status - stripped by the California Rancheria of 1958 - and the Bureau of Indian Affairs worked with two families to create a tribal government.

But those families, the Wyatts and the Ramirezes, became locked in a bitter feud for control of the tribe. The Wyatt descendants eventually gained control and adopted a constitution in 1988, but persistent skirmishes boiled over in 2011 when the tribal council fractured into three factions - each claiming its leader to be the chairman.

Madera County Sheriff John Anderson sued the tribe and the Lewis faction in October, after faction leaders set up their own court and slapped Anderson with a restraining order to keep him from entering tribal land. A federal judge had given the sheriff's department law-enforcement jurisdiction over the rancheria as part of a settlement over property taxes in 2007.

In the new lawsuit on Tuesday, the rancheria and its economic development agency, led by the Lewis faction, accused another group - the Ayala faction - of taking millions in casino revenue and depositing it in an account with defendant Tri Counties Bank.

The tribe claims the Ayala faction's actions violate a New York court order to use a Rabobank account, so the tribe's creditors will be paid as part of a debt restructuring deal.

The Ayala faction managed this through an illegal takeover of the tribe this year, according to the Lewis faction.

"Nancy Ayala accepted an unconstitutional referendum signed by a mere 46 tribal members," the Lewis-led tribe says in its complaint. "The petition stated that the 14 signatures constituted 30 percent of the tribe's membership, as required under the tribe's constitution, and that an 'independent audit' had purportedly revealed that there were only 46 members of the tribe.

"Ayala illegally and unilaterally approved the 'referendum' which purportedly disenrolled over 850 tribal members, thereby fundamentally and drastically changing the makeup of the general council," the tribe claims. "She then removed all members of the duly elected tribal council, except herself, and appointed her supporters and family members to the council."

Ayala then took control of tribal government buildings and the casino, using "known gang members and convicted criminals" to police the place, according to the Lewis faction's lawsuit.

Pursuant to the tribal constitution, the tribe then hired the nonprofit Indian Dispute Resolution Services to settle the quarrel. The company held three-month-long tribal elections, at which the Lewis faction garnered 55 percent of the full tribal vote.


Despite this - and despite decisions by three different banks the tribe uses that Lewis faction leader Reggie Lewis is the true head of the rancheria - the Ayala faction refuses to back down. So in September, for only the second time in the tribe's modern history, its general council held a full membership meeting to settle the tribe's governance.

"At the Sept. 14, 2013 meeting, the general council passed a resolution titled 'To Restore Legitimate Governing Authority of the Tribe, the Authority, Casino and Tribal Gaming Commission' which, among other provisions, affirmed that the tribal council is comprised of Reggie Lewis as chairman; Carl 'Buzz' Bushman, vice chairman; Irene Waltz, secretary; Chance Alberta, treasurer; David Castillo, member at-large; Lynn Chenot, member at-large; and Mel Espe, member at-large," the tribe says in its lawsuit. "The general council resolved that Nancy Ayala and the Ayala faction had no authority to act on behalf of the tribe with regard to any matters, including financial matters."

The lawsuit continues: "The general council further affirmed that the tribal council, as led by Chairman Reggie Lewis, was duly authorized and empowered on behalf of and in the name of the tribe, the Chukchansi Economic Development Authority, the gaming commission and the casino to make all decisions on behalf of the tribe, CEDA, the gaming commission and the casino. The general council resolved that this tribal council was authorized to take actions on behalf of the tribe and its instrumentalities in court actions and in negotiations with outside governmental and commercial entities, and that outside agencies and entities doing business or negotiating with the tribe should not recognize the Ayala faction or any other faction purporting to represent the tribe, CEDA, the gaming commission or the casino."

The general council sent a directive to its major creditor, Wells Fargo, and to casino cage depository Rabobank, that only the Lewis council spoke for and made decisions for the tribe - and ordered both banks to cease communications with the Ayala faction. It also ordered casino managers to deposit all gaming proceeds into the Rabobank account.

But Ayala and her security forces remain ensconced in both the tribal government compound and the Chukchansi Gold Casino and Resort, the Lewis group says.

"The Ayala faction has total control over all casino revenues and has been depositing these revenues into various banks, including defendant Tri Counties Bank," the tribe says in its complaint.

Since Wells Fargo and other creditors receive payment automatically from the Rabobank account, none of the tribe's huge bills - a $250 million loan to Wells Fargo alone - are being paid, the tribe claims.

And it says Ayala's financial mismanagement doesn't end there.

"The Ayala faction has also used its physical control over the casino and its funds to perpetrate various illegal and/or criminal actions including, but not limited to:

a. Hoarding cash in the casino cage instead of regularly depositing casino revenues into bank accounts;

b. Knowingly issuing thousands of dollars in bad checks to casino employees and vendors;

c. Drafting fraudulent checks bearing unauthorized signatures in the name of CEDA; and

d. Knowingly employing convicted criminals on tribal property (including members of the infamous 'Fresno Bulldogs' gang), using tribal revenues to employ these convicted criminals, and either directly arming these convicted criminals and gang members with weapons or permitting such persons to arm themselves while purportedly working as guards," the tribe says in the complaint.

In addition to loading up pickup trucks with "millions of dollars" in casino cash, the tribe claims, Ayala left the Rabobank account dry and the tribe missed its court-ordered October payment to Wells Fargo. The New York court then ordered Ayala to provide unaudited financial statements to both the Lewis faction and a court-appointed referee to formulate yet another repayment plan.

Ayala responded by diverting cash to Tri Counties bank, according to the tribe.

"Upon information and belief, beginning last month and as recently as Oct. 21, the Ayala faction delivered large sums of cash - even in armored cars - to Tri Counties Bank and has either deposited those funds or requested cashier's checks or money orders in exchange for those funds," the tribe states.

The Lewis faction's lawyers sent a letter to the bank's Modesto branch manager, defendant Parson, demanding that the bank freeze the accounts of individuals associated with the Ayala faction and return the money to the tribe.

"On Nov. 6, Benjamin Anderson, the assistant general counsel for Tri Counties Bank, sent correspondence to counsel for the tribe and CEDA, stating that the bank's hold on all disputed funds would extend until the end of business on Tuesday, Nov. 12, 2013," the tribe says.

Anderson is not a party to the complaint.

"Such correspondence further stated that if any disputant produces an order from a California court directing Tri Counties Bank to deliver the funds of specific accounts to a determined person or entity, the bank would abide by that order," the tribe adds. "However, if no such order was offered by close of business on Nov. 12, the bank would close the accounts and pay the balance to the account holders."

The tribe filed its complaint on Nov. 12.

They seek a court declaration that the Lewis faction is the rightful leader of the tribe and have the right to the funds held by Tri Counties Bank. They also seek an emergency injunction enjoining the bank from releasing the money to the Ayala faction unless otherwise directed by the court.

The Picayune Rancheria of the Chukchansi Indians is represented by Robert Rosette, of Folsom.

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