HELENA — Three executives of Nevada-based consulting firm will pay a Native American tribe in Montana $2.5 million and face possible prison time for their roles in funneling cash from the tribe’s online lending company and kicking back some of the money to tribal officials.
The firm, Encore Services LLC, and the executives, Zachary Roberts, Martin Mazzara and Richard Broome, pleaded guilty earlier this week to wire fraud conspiracy. The firm, represented by Roberts, also pleaded guilty to money laundering conspiracy.
The guilty pleas appear to settle years of civil and criminal litigation in the dispute between Montana’s Chippewa Cree Tribe and Encore, which was the tribe’s partner in its first attempt to start an online lending company in 2010.
That company ultimately failed, but the Chippewa Cree started a successful company called Plain Green that makes short-term, high-interest internet loans.
Encore claimed to have exclusive partnership rights to all of the tribe’s lending operations, and entered into a “fee agreement” with a tribal leader and a Plain Green official in which Encore would receive 15 percent of the revenues from the new lending company.
Encore received $3.5 million between 2011 and 2013 under the arrangement, which was not known to the rest of the tribe, according to court filings. The Encore executives kicked back $1.2 million of that money to a shell company set up by two Plain Green executives and a consultant who worked closely with the tribe, prosecutors said.
The two Plain Green executives, Billi Anne Morsette and Neal Rosette, were sentenced to more than three years in prison in 2016 for stealing from the company and taking bribes. The consultant, James Eastlick Jr., was convicted in a separate corruption scheme involving the tribe, and his plea agreement made him immune from the Plain Green prosecution.
Roberts, Mazzara and Broome will be sentenced on Aug. 24. Each faces a maximum penalty of five years in prison and a $250,000 fine. The firm itself could be fined up to $2.9 million at sentencing.
In addition, both sides agreed the tribe is owed $2.5 million in restitution. Of that, $1.1 million was previously ordered in the settlement of a civil lawsuit that the Chippewa Cree tribe had filed against Encore.
The plea agreements in the criminal case call for Roberts and Mazzara to pay the tribe an additional $700,000 each. The money is to be paid in full, or collateral secured, before the sentencing hearing, according to Roberts’ plea agreement.