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Court rules on BIA officer's embezzlement case

Court rules on BIA officer's embezzlement case

Appeals court reverses most counts in BIA officer's corruption conviction

  • Updated

HELENA — An appellate-court panel Friday upheld a bribery conviction for the former Fort Peck superintendent for the Bureau of Indian Affairs, but reversed four other convictions involving her role in a loan fraud scheme.

The 9th U.S. Circuit Court of Appeals sent Florence White Eagle's case back to district court for resentencing. White Eagle was sentenced to more than 4 years in prison in 2011 after a jury convicted her of conspiracy, theft, bribery and concealment of public corruption and other charges.

Prosecutors say that until 2008, Fort Peck Credit Program employees submitted loan applications in the names of their relatives and then split the cash.

The program was meant to provide a supplemental source of credit to tribal members and raise their economic status.

An audit found that of $1.6 million loaned by the program, $1.2 million went to program employees and relatives.

Ten people were convicted, including White Eagle. A main participant in the scheme, BIA administrative officer Toni Greybull, died in 2008.

Prosecutors say Greybull took loans on behalf of relatives and circumvented loan application reviews by approving many of the loans herself.

In 2008, after Greybull died, her sister approached White Eagle about how to repay a loan Greybull had taken out in her name. White Eagle then told Greybull's husband that his late wife — and not the people whose names were on the loan applications — had outstanding loans that had to be repaid, prosecutors said.

White Eagle did so because she was worried that questions about the loans would lead to an audit, prosecutors said.

The year before, Greybull's mother, Patricia Menz, learned loans had been taken out in her name without her knowledge, and she reported it to the Office of the Inspector General.

White Eagle sent Menz a letter telling her that she owed nothing because the loans had been wrongly listed in her name, and they were paid off.

The day before she sent that letter, White Eagle received approval through the credit program for a loan modification worth $15,000.

White Eagle's letter was an attempt to cover up the scheme and the loan modification was a payoff from Greybull to White Eagle, prosecutors said.

The jury found White Eagle guilty of conspiracy to convert tribal credit program proceeds, theft and conversion from an Indian tribal organization, bribery, concealment of public corruption, public acts affecting a personal financial interest and misprision of a felony.

The 9th Circuit panel reversed all counts except bribery and misprision of a felony, which means White Eagle failed to report a felony to the proper authorities.

"Without a doubt, White Eagle turned a blind eye to fraud and facilitated its cover up. The difficulty for the prosecution is that, in the main, the crimes charged did not fit the facts," the panel ruled.

Prosecutors presented no evidence that White Eagle herself defrauded the credit program and she never controlled the money she later borrowed, so there was no conversion of funds or embezzlement, the panel said.

She violated an employer's instruction and a civil conflict-of-interest rule not to participate in the program, but that doesn't support a conviction for those crimes she was charged with, the judges said.

But it did appear that White Eagle wrote Menz the letter in exchange for Greybull's help in securing a quick loan modification, which supports the bribery conviction, according to the ruling.

"The jury had ample evidence to conclude that White Eagle's actions were 'corrupt,'" the ruling said.



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