Seven people have been charged in a check cashing and wire transfer scheme that withdrew $17,599 from the Ute Mountain Ute Tribe government fund.
The felony charges were filed Dec. 13 in U.S. District Court in Durango, and are part of an ongoing investigation, said Jeff Dorschner, public affairs officer for the U.S. Department of Justice.
“The investigation has been going on since the summer of 2016,” he said. The FBI and IRS are investigating the case, he said.
The seven defendants who face charges are: Darrell Jonah Lee, Loia Kay House, Myreon Lehi, Ladelda Lopez, Oraleigh Jaramillo, Jennifer Ann Pioche and Leslie Wayne Rouillard.
Court officials said some of the defendants are Ute Mountain Ute tribal members but would not disclose who they are. No arrests have been made, but at least one tribal employee was terminated, a tribal attorney said.
Any staff member “that the tribe believed was involved was let go,” said Peter Ortego, general counsel for the Ute Mountain Ute tribe. “We are implementing safeguards to prevent this from happening again.”
Jaramillo was an employee of the tribe’s financial services department, according to court records.
Of the defendants, Jaramillo faced the most serious charges, including embezzling $5,707 and money laundering. According to court records, from June 5 to July 3, 2014, she allegedly wrote out seven checks to herself that drew on tribal government funds.
On the charge of money laundering, Jaramillo is accused of having another person cash an unauthorized $1,300 check that was drawn on tribal government funds. The check was made out to the initials “A.S.” and cashed at the Ute Mountain Ute Casino. She faces up to 10 years in prison on the embezzlement charge, and up to 20 years on the money laundering charge.
The other six defendants were charged with willfully misapplying checks from tribal funds. They face up to five years in prison.
According to the charges, of the unauthorized checks payable to the defendants, Lee received $1,500, House received $1,175, Lehi received $2,000, Lopez received $1,875, and Pioche received $1,800. Rouillard received a total $2,242 from three unauthorized wire transfers of funds belonging to the Ute Mountain Ute tribe, records show.
All the defendants entered not guilty pleas, but Lee, House, Lopez, and Jaramillo have scheduled change of plea hearings set for February, court documents show.
Dorschner said he could not elaborate on the nature of the financial scheme until the investigation and court cases were concluded.
None of the funds taken without authorization have been recovered, he said. The tribe has cooperated with the investigation.
Tribe members have suspected foul play for more than two years, but tribal and U.S. officials have remained silent.
On Oct. 2, 2015, The Journal reported that the U.S. Justice Department was actively investigating a case on the Ute Mountain Ute reservation in Towaoc, but the agency provided no additional details.
Two days earlier, a Ute Mountain Ute tribal member told a Journal reporter on the condition of anonymity that several finance department employees were escorted from their offices in the afternoon by “security.” The tribal member said the investigation centered on “misuse of funds.”
In March 2016, Ute Mountain Ute tribal members reported to The Journal that a petition was being circulated for a referendum calling for an independent investigation about whether there has been “misuse of funds at the tribal finance department.”
The referendum reviewed by The Journal also called for “tribal members and officials involved in financial corruption be removed from office.” It demanded that “a complete accountability and report of the tribal financial expenditure be subject to public inspection and review.”
The petition began circulating in October 2015 after witnesses reported that several staff of the finance department had been escorted out of the tribal government complex by security officers. Two-thirds of the required number of signatures had been obtained, but had not been verified by election officials, according to a tribal member who spoke on condition of anonymity. The referendum was soon dropped.