REDDING, Calif. (CN) - A northern California tribe claims in court that its former economic development director swiped $838,000 to buy himself a house.
The Paskenta Band of Nomlaki Indians sued John Crosby, his wife, Cornerstone Community Bank and Quicken Loans, on Feb. 11 in Shasta County Court.
The tribe, whose land is in Tehama and Glenn counties, sought venue in Shasta County because the property in dispute is there. The tribe of roughly 240 members operates the Rolling Hills Casino in Corning.
It claims that while working as economic development director in January 2012, Crosby withdrew $838,434.14 in cash from a tribal account at Cornerstone Community Bank, bought a cashier's check for that amount, and used it to buy a house in his and his wife's names.
The Crosbys then borrowed money against the house - $417,000 from Quicken Loans and a revolving loan of $190,650 from Cornerstone Community Bank, according to the complaint.
"Plaintiff only became aware of Mr. Crosby's actions following his termination in April 2014 and after conducting a months-long investigation into the unlawful dealings of Mr. Crosby and others," the complaint states.
The property is listed for sale with an asking price of $1.3 million, the tribe says. It claims it is the rightful owner of the property because Crosby bought it with tribal money.
It seeks a judicial determination of the parties' rights and obligations, an injunction preventing sale, and quiet title against any claims by the Crosbys or the lenders.
"Unless and until they are enjoined and restrained by this Court, the Crosby defendants' continued possession of the subject property and their efforts to sell it will cause great and irreparable injury to plaintiff in that the subject property could be sold without plaintiff's knowledge and permission, and the proceeds from any such sale, which rightfully belong to plaintiff, could be placed in accounts inaccessible to plaintiff," the complaint states.
On June 3, 2014 the tribe said in a statement that an internal audit of its business accounts had revealed embezzlement by John Crosby and others. The statement said Crosby is a former FBI agent . The tribe alleged that Crosby and the tribe's former treasurer's husband set up an account with themselves as signatories and wrote hundreds of thousands of dollars worth of checks to each other.
"Crosby wrote over $600,000 in checks for home improvement, including landscaping, a tennis court, pool construction and an outdoor kitchen," the tribe said.
Tribal representatives were not available for comment Thursday.
Their lead counsel is Andrew Purdy with the Joseph Saveri Law Firm, of San Francisco.
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