HELENA — Two former leaders of an online lending company owned by Montana’s Chippewa Cree Tribe have pleaded not guilty to new criminal charges that accuse them of funneling money from the company, through a business partner in Nevada and into their own pockets.
The grand jury indictment made public Tuesday in U.S. District Court in Great Falls charges Neal Rosette and Billi Anne Morsette with eight criminal counts that include conspiracy to defraud the tribe, accepting bribes and evading taxes.
Rosette and Morsette used to run Plain Green, the Chippewa Cree’s lucrative company that makes short-term Internet loans at high interest rates. They also ran the tribe’s first attempt to start a lending company, the now-defunct First American Capital Resources.
Rosette and Morsette previously pleaded not guilty to an earlier indictment that accused them of embezzling more than $55,000 from First American.
The new indictment accuses them of being involved in a conspiracy along with former tribal leaders John “Chance” Houle, Bruce Sunchild, James Eastlick Jr. and a Havre businessman named Shad Huston.
The group diverted Plain Green revenue to a Nevada company called Encore Services, then used a shell company to take some of that money for their personal benefit, prosecutors said.
Encore Services was brought on as a partner to run First American in 2010 before it went defunct. Encore was not involved in Plain Green’s operations, but Rosette and Houle agreed to a deal that allowed Encore to receive money from any Chippewa Cree Internet lending company, according to the indictment.
The agreement entitled Encore to receive a percentage of Plain Green’s revenues. Rosette, Morsette and Eastlick then created a company named Ideal Consulting that charged fees to Encore, though they did no work on the Nevada company’s behalf, prosecutors said.
Using that system, Encore received about $3.5 million from Plain Green between 2011 and 2013, and Rosette, Morsette and Eastlick took more than $1.2 million of that money, prosecutors said.
Eastlick, Houle, Huston and Sunchild are serving prison sentences for separate convictions stemming from a wide-ranging corruption investigation into the Rocky Boy’s Indian Reservation. Their plea agreements stipulate that they can’t be charged with additional crimes, such as the new indictment.
Rosette previously acknowledged to The Associated Press that he received the payments, but he said Plain Green’s board of directors offered to make them because the board feared he and Morsette would help other tribes open their own lending companies.
The hidden payments to Ideal Consulting were the subject of an arbitration dispute last year between the tribe and Encore. An arbitrator ruled the hidden payments voided the company’s contract with the tribe and ordered it to repay the Chippewa Cree $1.1 million.
The tribe is suing Encore Services for the rest of the money paid under what the tribe called a fraudulent contract.
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