Two former Fort Peck tribal employees admitted Wednesday that they embezzled thousands of dollars from a credit program in a long-running scheme in which more than $1 million was stolen.
Evadna M. Running Bear, 70, and Angelita Marie Headdress, 28, both of Poplar, pleaded guilty in federal court in Great Falls to theft from an Indian organization and to conspiracy to obstruct a federal audit. Two other counts against each defendant are to be dismissed at sentencing under the terms of a plea agreement.
Running Bear and Headdress are the fourth and fifth of six people charged in a 13-count fraud indictment to plead guilty.
Assistant U.S. Attorney Carl Rostad said Running Bear started work in the tribe’s Credit Department in 1985 as an accounting technician and was a lead accounting technician when she was fired in July 2009. She was the most senior of the tribal employees and was the primary loan collector for the program.
Headdress also worked in the Credit Department, beginning as a clerk in 2003 and ending as an accounting technician when she was dismissed in July 2009. She was responsible for posting loan payments.
The indictment accuses the defendants of embezzling money from the Fort Peck Credit Program and then trying to hide the thefts by altering computer information and replacing their names on loans with those of deceased tribal members. The scheme ran from August 1999 until May 2009. The loans far exceeded the program’s limits on number and the $2,000 maximum amount in short-term loans that could be provided.
As of June 2009, outstanding short-term loans totaled $1.6 million, with more than $800,000, or 48 percent, of the amount going to Credit Program employees and their families, Rostad said in court records.
An investigation by the U.S. Department of Interior’s Office of Inspector General found that almost half of all loans were fraudulent.
The Credit Program was created with money provided to the Assiniboine and Sioux tribes of the Fort Peck Reservation to promote access to capital and increase economic opportunities for tribal members. Congress suspended the funding in 1995, but federal policy continues to regulate the operation of credit programs.
Running Bear and Headdress were accused of conspiring with the deceased Toni Graybull, of Poplar, who was the BIA administrative officer from 2001 until her death in 2008, and others. Graybull previously managed the Credit Program.
Rostad said the investigation found that 184 checks totaling $181,234 from the Credit Program were payable to Running Bear during the 10-year period. Most of the payments were recorded as short-term loans. Some were for miscellaneous expenses like bonuses, reimbursement and overtime; however, standard deductions were not withheld from those payments.
Running Bear also admitted she had a role in and personally benefited from the 30 short-term loans totaling $42,434 issued in the names of her children and grandchildren. Running Bear also got a $40,233 long-term loan and had not made payment on an outstanding balance of $12,502 since 2005.
In Headdress’ case, investigators found that she received 69 checks totaling $48,117 from the Credit Program. Most of the payments were for short-term loans while some were recorded as miscellaneous expenses similar to Running Bear’s.
In addition, another $141,705 in loans were issued to Headdress’ immediate family, Rostad said.
The government will seek $189,822 restitution from Headdress and not charge any family member receiving less than $10,000 from the program, the plea agreement said.
Headdress disputed having any role in getting fraudulent loans for family members.
The government said in Running Bear’s plea agreement that it will not bring charges against her son and granddaughter, both of whom received money. The agreement did not address restitution.
Sentencing is set for Oct. 21 for both Running Bear and Headdress. They face a maximum five years in prison and a maximum $250,000 fine.
Co-defendants who have pleaded guilty include ex-Bureau of Indian Affairs employees Shelly Devonne Pipe of Wolf Point; Paul James Bemer of Poplar; and former tribal employee Dolly Diane Crowe of Poplar. Defendant Connie Jean Smith of Poplar has pleaded not guilty but has filed a request to change her plea.