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20150310 Pbni Complaint

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20150310 Pbni Complaint Case 2:15-cv-00538-GEB-CMK Document 1 Filed 03/10/15 Page 1 of 171 1 STUART G. GROSS (State Bar No. 251019) JOSEPH R. SAVERI (State Bar No. 130064) 2 [email protected] [email protected] GROSS LAW, P.C. ANDREW M. PURDY (State Bar No. 261912) 3 The Embarcadero [email protected] 4 Pier 9, Suite 100 KEVIN E. RAYHILL (State Bar No. 267496) San Francisco, CA 94111 [email protected] 5 t (415) 671-4628 JOSEPH SAVERI LAW FIRM, INC. f (415) 480-6688 505 Montgomery Street, Suite 625 6 San Francisco, CA 94111 t (415) 500-6800 7 f (415) 395-9940 8 Attorneys for Plaintiffs the Paskenta Band of Nomlaki Indians 9 and the Paskenta Enterprises Corporation 10 UNITED STATES DISTRICT COURT 11 EASTERN DISTRICT OF CALIFORNIA 12 PASKENTA BAND OF NOMLAKI INDIANS; Case No. 13 and PASKENTA ENTERPRISES CORPORATION, 14 COMPLAINT Plaintiffs, 15 DEMAND FOR JURY TRIAL 16 v. 17 INES CROSBY; JOHN CROSBY; LESLIE LOHSE; LARRY LOHSE; TED PATA; JUAN 18 PATA; CHRIS PATA; SHERRY MYERS; 19 FRANK JAMES; UMPQUA BANK; UMPQUA HOLDINGS CORPORATION; GARTH 20 MOORE; GARTH MOORE INSURANCE AND FINANCIAL SERVICES, INC.; 21 ASSOCIATED PENSION CONSULTANTS, INC.; HANESS & ASSOCIATES, LLC; 22 ROBERT M. HANESS; THE PATRIOT 23 GOLD & SILVER EXCHANGE, INC.; and NORMAN R. RYAN, 24 Defendants, 25 QUICKEN LOANS INC., 26 27 Nominal Defendant. 28 GROSS LAW, P.C. THE EMBARCADERO ____________________________________________________________________________________________ PIER 9, SUITE 100 SAN FRANCISCO, CA COMPLAINT 94111 Case 2:15-cv-00538-GEB-CMK Document 1 Filed 03/10/15 Page 2 of 171 1 TABLE OF CONTENTS 2 NATURE OF THE ACTION ......................................................................................................... 1 3 JURISDICTION AND VENUE ..................................................................................................... 6 4 PARTIES ........................................................................................................................................ 7 5 I. PLAINTIFFS ................................................................................................................ 7 6 II. DEFENDANTS ........................................................................................................... 7 7 A. The RICO Defendants ..................................................................................... 7 8 1. The RICO Ringleaders ......................................................................... 7 9 2. The Other RICO Defendants ............................................................... 8 10 3. The Abettor Defendants ....................................................................... 9 11 4. Nominal Defendant ............................................................................ 12 12 FACTUAL ALLEGATIONS ....................................................................................................... 12 13 I. RICO Defendants Take Control of the Tribe and its Non-Casino Business Holding 14 company, Using racketeering means .......................................................................... 12 15 A. History and Background of the Paskenta Band of Nomlaki Indians ............ 14 16 1. The Nomlaki People’s Origins and Early Contact with European Settlers ................................................................................................. 14 17 2. Indian Removal by the United States Government and the Creation 18 and Termination of Paskenta Rancheria ............................................. 14 19 3. Restoration of the Paskenta Band of the Nomlaki Indians, the Establishment of a Tribal Government and Its Economic Self- 20 Sufficiency .......................................................................................... 15 21 B. The RICO Ringleaders Gain Membership in the Tribe and Through Illegitimate and Coercive Means Begin Taking Control of the Tribe ............ 18 22 C. Rolling Hills Casino Was Established and Became Successful With Little 23 Assistance from the RICO Ringleaders .......................................................... 22 24 D. The RICO Ringleaders Employed a Pattern of Racketeering and Other Wrongful Means to Consolidate and Maintain Their Control Over the Tribe 25 and its Non-Casino Business Ventures ........................................................... 24 26 1. RICO Ringleaders Rigged the Electoral Process to Ensure the Continued Election of Leslie Lohse to the Position of Treasurer and 27 Compliant Individuals to the Other Council Seats ............................. 24 28 2. The RICO Ringleaders Consolidated Their Control of the Tribe by Tightly Controlling the Flow of Information ...................................... 28 GROSS LAW, P.C. THE EMBARCADERO ____________________________________________________________________________________________ PIER 9, SUITE 100 SAN FRANCISCO, CA COMPLAINT 94111 i Case 2:15-cv-00538-GEB-CMK Document 1 Filed 03/10/15 Page 3 of 171 1 3. The RICO Ringleaders Purchased the Silence of Others and Recruited 2 Them into the RICO Enterprise Through Bribery .............................. 34 3 4. The RICO Ringleaders Exploited Tribe Members’ Economic Reliance on Per Capita Payments to Quash any Opposition to Their Control, 4 Real or Perceived ................................................................................ 37 5 II. Rico Defendants, with Substantial Assistance from Abettor Defendants, Stole Millions of Dollars in Tribal Funds Through a Pattern of Fraud and Outrageous Self- 6 Dealing ........................................................................................................................ 38 7 A. The RICO Ringleaders, with Substantial Assistance from the Abettor Defendants, Used Their Control of the Tribe to Cause it and Tribe-Owned 8 Businesses to Pay Them and Their Family Grossly Excessive and Unauthorized Compensation ........................................................................... 42 9 1. Excessive and Unauthorized Non-Retirement Compensation Paid by 10 the Tribe and Casino ........................................................................... 42 11 2. With Substantial Assistance from Abettor Defendants Haness, Moore, and APC, the RICO Ringleaders Caused the Tribe to Pay Them 12 Extraordinary Amounts in Retirement Compensation ........................ 51 13 3. Excessive and Unauthorized Compensation Caused to be Indirectly Paid to the RICO Defendants by the Tribe through Tribe-Owned 14 Businesses ........................................................................................... 67 15 4. Total Amounts of Excessive and Unauthorized Compensation Discovered Thus Far ........................................................................... 72 16 B. The RICO Ringleaders, with Substantial Assistance from the Abettor 17 Defendants and Certain Co-RICO Defendants, Used Their Control of the Tribe’s Bank Accounts to Convert and Embezzle Millions of Dollars of the 18 Tribe’s Money ................................................................................................. 73 19 1. With Substantial Assistance from Abettor Defendant Umpqua Bank, the RICO Ringleaders Directly Stole Millions in Tribal Money from 20 the Tribe’s Bank Accounts at Umpqua Bank ..................................... 74 21 2. The RICO Defendants Directly Stole Millions in Tribal Money from the Tribe’s Bank Accounts at Cornerstone Bank ................................ 77 22 3. The RICO Defendants Directly Stole Several Hundred Thousand 23 Dollars in Tribal Money from the Tribe’s Bank Accounts at US Bank 81 24 4. The RICO Defendants Directly Stole Tens of Thousands in Tribal 25 Money from the Tribe’s Bank Accounts at Rabobank ....................... 82 26 5. The RICO Defendants Directly Stole Tens of Thousands in Tribal Money from the Tribe’s Bank Accounts at Premier West Bank ........ 82 27 C. The RICO Ringleaders Used Their Control of the Tribe’s Bank Accounts to 28 Conduct Fraudulent Transactions that Resulted in the Transfer of Tribal Money to the RICO Ringleaders ..................................................................... 82 GROSS LAW, P.C. THE EMBARCADERO ____________________________________________________________________________________________ PIER 9, SUITE 100 SAN FRANCISCO, CA COMPLAINT 94111 ii Case 2:15-cv-00538-GEB-CMK Document 1 Filed 03/10/15 Page 4 of 171 1 1. Fraudulent Circuit Transactions in the Tribe’s Accounts at Tri 2 Counties Bank ..................................................................................... 83 3 2. $192,000 Loan of Tribal Money to RICO Ringleader Ines Crosby’s Future Brother-In-Law ........................................................................ 85 4 3. After Using the Tribe’s Money to Purchase Luxury Homes for 5 Himself, RICO Ringleader John Crosby Took Out Large Home Equity Loans on the Homes ............................................................................ 87 6 D. The RICO Ringleaders, with Substantial Assistance from Abettor Defendants 7 Umpqua Bank Used, Without Authorization or Consent, Millions of Dollars of the Tribe’s Money to Purchase Goods and Services Personally Consumed 8 by the RICO Defendants ................................................................................. 88 9 1. The RICO Ringleaders Caused the Tribe to Pay for Tens of Millions of Dollars in Personal Travel by Private Jet for Them and Their Family 10 Members ............................................................................................. 89 11 2. The RICO Ringleaders Used Tribal Money to Pay
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