News & Features

Chippewa Cree Tribal Members Funneled Cash from Lending Company

Plain Green Loans has been a lucrative business for the tribe located on the Rocky Boy's Indian Reservation

HELENA — The Chippewa Cree tribe’s former health director and two former leaders of a tribe-owned online payday loan company secretly received 7 percent of the revenues of the company that has made $25 million since 2011, new court documents revealed.

Details about the hidden payments made to former Plain Green executives Neal Rosette and Billi Anne Morsette, along with ex-health director James Eastlick Jr., are revealed in an arbitration award that was attached to a lawsuit filed this month by the tribe.

The July 31 award by Patrick Irvine for the American Arbitration Association found that Nevada-based Encore Services LLC and tribal leaders hid the agreement that sent 5 percent of Plain Green’s gross revenues to a company called Ideal Consulting owned by Rosette and Morsette.

Eastlick received a share of that money, plus another 2 percent of revenues funneled to a company he owned called Trio Consulting.

The money was provided to the consulting companies from the 15 percent share of Plain Green’s revenues given to Encore, which provided management and consulting services for the tribe’s online lending programs.

But Encore and tribal leaders concealed those payments from the rest of the tribe by not disclosing them in Encore’s fee agreement, Irvine ruled.

The arbitrator arrived at that conclusion after hearing testimony from Encore’s owners, who said the tribe wanted Encore to help it set up an “executive retention plan” for Rosette and Morsette.

“It was my understanding that the board of directors did not want the rest of the community to be aware that Neal and Billi Anne were getting the extra money,” Encore’s managing member, Zachary Jones, testified in an arbitration hearing.

Payments were made to Eastlick because of his influence with the tribe, according to the tribe’s lawsuit filed this month in U.S. District Court in Great Falls.

“While Eastlick has no experience in online lending, he was one of the few health care providers available to tribal members and had significant influence in the community,” the lawsuit said.

Jones did not return a call for comment Monday. Eastlick’s attorney, Vernon Woodward, also did not return a message.

A phone number for Rosette was disconnected. There was no listing for Morsette.

Plain Green Loans has been a lucrative business for the tribe located on the Rocky Boy’s Indian Reservation in northern Montana. The company charges borrowers annualized interest rates of up to 379 percent, and the tribe’s status as a sovereign nation allows it to ignore a Montana law that caps interest rates of 36 percent.

Irvine awarded the Chippewa Cree $1.1 million and voided the fee agreement after ruling that Encore was aware the terms of its fee agreement with the tribe were meant to conceal the facts and deceive tribal members who might have objected.

The tribe was seeking $13.1 million from Encore, which amounted to the full amount the Nevada company took from Plain Green plus what the tribe claims was siphoned by Encore from another online lending company called First American Capital Resources.

Encore helped set up and manage First American Capital Resources for the tribe starting in 2010. The tribe claimed Encore’s owners didn’t deliver on promised investments, mismanaged the company and awarded contracts to shell companies that performed no services.

But the arbitrator ruled the tribe was due only the money that was passed on from Encore to the tribal members, and denied their other claims.

The tribe then filed a lawsuit in U.S. District Court seeking the full $13.1 million.

It names Encore and its owners as defendants, but not Rosette, Morsette or Eastlick. Tribe attorney Richard Zack declined to say why or to comment on the case other than to read a prepared statement.

“The tribe intends to vigorously pursue this action and protect and enforce its rights through the legal process,” he said.

Eastlick pleaded guilty in May to bribery and theft in separate criminal cases involving kickbacks to tribal leaders in an ongoing federal investigation into tribal corruption. He is scheduled to be sentenced this month.

Assistant U.S. Attorney Carl Rostad said he was aware of the tribe’s lawsuit but could not comment on whether a criminal investigation is underway into the Plain Green profits.

Comments

comments