August 3, 2011

Investor in Insurance Agency Accused of Pyramid Scheme Launching A Spin-Off

Filed under: Business,News Alerts — Tags: , , , — ICTMN Staff @ 8:22 pm

First Americans Insurance Service, the Grand Island, Nebraska-based insurance agency that declared bankruptcy in January 2009, is being charged by federal prosecutors as having operated one of the nation’s largest Ponzi schemes. And a man who lost his $3.7 million investment in First Americans, Gary Shovlain, is so convinced of the executive’s innocence that he hired two of the people behind First Americans to advise him in launching a new insurance company also seeking Native clients, reported the Lincoln Journal Star.

“This is America. They’re innocent until proven guilty,” Shovlain told the Lincoln Journal Star. “There’s no Ponzi scheme.”

But federal prosecut0rs contend otherwise. They charged three officers behind First Americans—Stella Levea, James Masat and Kenneth Mottin— with 25-count indictments each through the U.S. Attorney’s office in Omaha in December. The trio allegedly committed conspiracy against the government, mail fraud and insurance fraud, reported the Associated Press. They could face five to 20 years in prison on each count if convicted, reported the Lincoln Journal Star.

The officers, who claimed between $100 million and $500 million in liabilities when they filed for Chapter 9 bankruptcy, have all pleaded not guilty.

Officers of the insurance company are accused of operating a Ponzi scheme—essentially a pyramid scheme that persuades people, or tribes, to invest in a fraudulent operation, reported the Lincoln Star Journal. The scam promised a high 12 percent return, which some early investors were paid, possibly through the money put in by later investors.

According to Sholvain, who later served as chairman of a creditors committee that worked with a federal bankruptcy trustee in reorganizing First Americans, the company’s promissory note program never intended to defraud anyone. It just collapsed when the economic recession led many investors to request that their initial investments be returned immediately.

Many investors have claimed in bankruptcy documents that they are owed millions of dollars.

Now Levea and Masat have joined forces as consultants with Sholvain for his new venture Native Nations Insurance, which is already under investigation by the Nebraska Department of Insurance, a department spokesperson told the Lincoln Star Journal. The new agency is incorporated under the Omaha Tribe of Nebraska—the tribe’s enterprise board approved the corporation on December 14.

Judi Morgan Gaiashkibos, executive director of the Nebraska Commission on Indian Affairs, told the Lincoln Star Journal that she is concerned the Omaha Tribe could get dealt the same hand as investors of First Americans.

“Our job is to be the watchdog for the tribes,” Gaiashkibos told the Lincoln Star Journal. “I see some red flags here that I think anyone would see.”

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January 19, 2012

Keystone XL: The Sandhills Problem

Previously: How Much Greenhouse Gas?

Early on, Nebraska was identified by pipeline-watchers as “Ground Zero in the Pipeline Fight”—and it’s an accurate label. Indeed, the rejection of the pipeline as proposed was to some extent due to the route it would take through Nebraska.

Nebaska sits atop the vast Ogallala Aquifer, a reserve of water that is something like an underground lake. According to a fact sheet at the USGS, “about 27 percent of the irrigated land in the United States overlies this aquifer system, which yields about 30 percent of the Nation’s ground water used for irrigation. In addition, the aquifer system provides drinking water to 82 percent of the people who live within the aquifer boundary.” The aquifer stis below portions of eight U.S. states, but the lion’s share (two-thirds) and its deepest parts are beneath Nebraska, particularly a region in north-central Nebraska known as the Sandhills. A 92-mile stretch of the proposed pipeline would have passed through the Sandhills.

tar sands icon Keystone XL: The Sandhills Problem

In the fall, anti-pipeline protests in the Sandhills grew contentious. At a U.S. State Department hearing held in a gymnasium in Atkinson, David Hutchinson, an organic rancher from Rose, Neb., who raises beef, buffalo, goats, potatoes and squash, testified that “A leak in the Keystone pipeline could conceivably contaminate the entire Ogallala Aquifer, in turn, disrupting the agricultural economy of Nebraska.” He also said that the proximity of the Aquifer water to the surface in the sandhills region, which is dotted with springs and artisanal wells, is another complicating factor. “The Sandhills are so fragile,” said rancher Sue Mitchell. “One little spill of oil can ruin all the water.”

Tribal leaders also weighed in at the Atkinson event. According to a story by the Lincoln Journal Star, Mitch Parker of the Omaha tribe spoke in support of the pipeline, praising TransCanada’s conduct during the building of the first Keystone pipeline (which passes through eastern Nebraska, clear of the sandhills). “TransCanada respects native culture,” Parker said, “and they consulted our historic preservation office in all their plans.” The Winnebago Tribe’s Frank LaMere disagreed. “I oppose [the Keystone XL pipeline] for many reasons,” LaMere said, “not the least of which is the fact that to our people, water is life and that this project would jeopardize our water, hence, our very existence.”

The battle lines drawn at the Atkinson hearing were stark, and emblematic of the larger ideas at issue: Labor unions, in support of the pipeline because they feel it would bring jobs to the region, wore orange; they were vastly outnumbered by the opposition, who dressed in red, the color of the state’s beloved University of Nebraska Cornhuskers. And the discussion extended beyond the Sandhills. The University of Nebraska Athletics Department scotched a sponsorship deal with TransCanada, the company seeking to build Keystone XL, after fans booed an advertisement shown at a home football game. The video clip dubbed Keystone XL the “Husker Pipeline.” The Lincoln Journal-Star quoted Cornhuskers fan Allen Schreiber, who saw the video at a football game just a week after he had participated in protests in front of the White House: “To me, that was just a real strong gut punch as a Nebraskan.”

In his statement rejecting the Keystone XL pipeline, President Obama said he was doing so out of concern for “the health and safety of the American people, as well as our environment.” So the sticking point is the Sandhills and Ogallala Aquifer, but it’s not clear what will happen next. The administration invited TransCanada to submit a revised proposal, which the company said it would do, but some pipeline advocates feel that if the President really wanted to make the pipeline happen, he would have acted differently. For instance, Nebraska Governor Dave Heineman suggested a conditional approval that would have enabled TransCanada to start the project immediately while the State Department and TransCanada worked on the details of the Nebraska re-route.

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March 2, 2012

Oglala Sioux VP Arrested in Alleged Alcohol-Related Incident

Thomas Poor Bear, vice president of the Oglala Sioux Tribe, was arrested February 19 on the Pine Ridge Reservation in what police are saying was an alcohol-related incident. Poor Bear insists the incident was racially motivated and that he wasn’t drinking according to an Associated Press article. The arrest comes less than a month after the tribe announced its lawsuit against brewers, retailers, and distributors of alcohol sold in Whiteclay, Nebraska.

Poor Bear, a major proponent of shutting down the beer stores in Whiteclay that provide the dry reservation with alcohol, said he was heading to the hospital for chest pains when he was stopped for not having a driver’s license. The AP story says Poor Bear continued to the hospital where a white officer attempted to arrest him.

The official charge on the report was obstructing government function while receiving treatment at a hospital and according to the AP said Poor Bear had bloodshot eyes and a blood-alcohol content of .306, nearly quadruple the legal limit for driving.

Poor Bear believes the obstruction charge will be dropped. The charge isn’t alcohol-related, but in the police report it states it was an alcohol related incident. He spent three nights in jail before being released February 22 and has a preliminary hearing appearance on March 16.

Read the full AP article here.

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March 19, 2012

Oglalas Ask Courts to Cap Whiteclay Beer Sales

Following up on a recently filed federal lawsuit against beer stores, breweries and other businesses involved in the Whiteclay, Nebraska alcohol trade, the Oglala Sioux Tribe has gone a step further and is requesting injunctive relief from the courts. The tribe wants the court to limit total volume of beer sales in Whiteclay—which lies on its southern border—to the amount that can be consumed in accordance with Nebraska and Oglala Sioux Tribe laws. The original lawsuit demanded a still-unspecified sum—widely reported as $500 million—for damages done to the tribe by generations of alcohol sales.

How much can be sold legally in Whiteclay? Very little, according to tribal attorney Thomas White, of White and Jorgenson, in Omaha. Last year, Whiteclay’s four take-out beer stores purveyed the equivalent of 4.3 million 12-ounce servings. However, there is no place in the town, such as a licensed bar or café, in which the public may drink alcohol legally. Therefore, White said, it must be either consumed in public in violation of Nebraska law or bootlegged onto the adjoining dry reservation in violation of Oglala Sioux Tribe law.

The tribe’s latest legal filing was inspired by public remarks by Nebraska Attorney General Jon Bruning, who said during a radio program about the original lawsuit that shutting down beer stores in Whiteclay would mean Pine Ridge residents would simply travel to other Nebraska towns to buy alcohol. That sentiment was echoed in a recent newspaper story by a resident of the town and in interviews filmed for the award-winning 2008 documentary Battle for Whiteclay.

With Nebraska’s top legal advisor indicating the state would not enforce its own liquor laws, the tribe was left with “no adequate remedies at law” to stem the ongoing flood of alcohol across its borders, says its most recent complaint.

The reservation was first declared dry, with alcohol use and sale prohibited, when it was formed in the mid-1800s. Bootleggers set up shop across the border in Whiteclay, Nebraska, almost immediately and began to peddle booze onto Pine Ridge, which to this day suffers crippling rates of alcoholism and alcohol-related public-health issues, overwhelming the tribe’s health-care, social-services, education and justice systems. One in four children are born with fetal-alcohol effects. All told, alcoholism impacts 85 percent of reservation families, and nearly all crime on Pine Ridge is alcohol-related, says the tribe—which has no jurisdiction over Whiteclay.

A tribal member who asked to remain anonymous for fear of retribution claimed the recent legal actions would help. “In a few minutes, you can stroll down to Whiteclay from Pine Ridge Village, the biggest population center on the reservation,” he said. “Sometimes people go several times a day. So if you stop the liquor trade in Whiteclay, you severely limit access to alcohol on Pine Ridge.”

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April 9, 2012

Winnebago Tribe Seeks to Reclaim Farming

The Winnebago Tribe’s award-winning economic development corporation Ho-Chunk Inc. has watched as crop prices and farm revenues have soared in recent years. Now the tribe is looking to invest in its remaining 20,000 farmable acres, reported the Omaha World-Herald.

The Winnebagos previously struggled to raise farming capital and leased parts of its reservation in northeast Nebraska to outside operations to grow corn and soybeans.

“We’re trying to take control of our own destiny,” said Lance Morgan, Ho-Chunk’s president, CEO and co-founder.

On April 5, Morgan was invited to participate in a White House Rural Council roundtable discussion about ways to foster American Indian agriculture, according to a Ho-Chunk press release. Topics centered around interagency coordination and revising existing policies to allow tribes more flexibility in obtaining government loans, Morgan said. The Native American Food and Agriculture Roundtable Discussion was also expected to cover leasing, technical assistance, strategic business planning and access to capital.

“What was amazing was how much resources are actually out there, but there was no coordinated effort to get this information to the tribes that want to get engaged,” Morgan told the World-Herald.

The Rural Council, chaired by Tom Vilsack, secretary of the U.S. Department of Agriculture, provides a forum to discuss policy initiatives and job creation in rural America. It was established by President Barack Obama in June.

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October 3, 2012

Oglala Sioux Tribe’s Alcohol Lawsuit Dismissed in Federal Court Without Prejudice

On October 1, a federal judge dismissed a lawsuit filed by the Oglala Sioux Tribe (OST) against brewers, retailers and distributors of alcohol sold in Whiteclay, Nebraska. The lawsuit was dismissed by U.S. District Court Judge John M. Gerrard, without prejudice, which means the tribe is free to take their claims to state court.

According to OST’s attorney and former Nebraska State Senator, Tom White, the judge had every opportunity to say the case did not have legal merit, but did not. “The defense did not get what they wanted,” says White. “The judge did not throw out even one claim and he read it carefully.”

In an article by CBS News, Gerrard wrote in his ruling: “There is, in fact, little question that alcohol sold in Whiteclay contributes significantly to tragic conditions on the reservation. And it may well be that the defendants could, or should, do more to try to improve those conditions for members of the tribe. But that is not the same as saying that a federal court has jurisdiction to order them to do so.”

Though the case was dismissed in Federal court, White says the judge was not just careful in his wording to avoid prejudice, he also flatly refused to throw out the case as requested by the defendant‘s lawyers.

“The defendant’s wanted that court to say that the things we alleged and claims we made were not even worthy of sitting in that court. The Judge specifically did not say that. He very carefully quoted the horrible injuries that alcohol does to the Oglala tribe and quoted from our petition that the alcohol sold in vast quantities were completely consumed.”

White stated that the case was not simply a dismissal.

“It looks like we got hammered,” said White. “When you have some of the most powerful corporations asking the judge to say there is no merit here and he won’t, that is not what they want to sell. The way I read it is they federally encouraged us to go to state court.

“What is nice about it is, if we go to state court we can get a state judge to order the liquor commission to close these guys down,” said White.

Earlier this year, the Oglala Sioux tribe filed a 500 million dollar lawsuit that claims the town of Whiteclay, Nebraska, which sits less than 250 feet from the border of the Pine Ridge Reservation and sells just nearly 5 million cans of beer annually, is responsible for the massive amounts of alcohol consumed as well as the collateral damages caused to the Pine Ridge Reservation.

Defendants in the lawsuit included four Whiteclay beer stores, as well as regional distributors and four manufacturers to include Anheuser-Busch, Molson Coors Brewing Company, Miller Coors LLC and Pabst Brewing Company.


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October 8, 2012

War on Columbus

Though the war on Christopher Columbus and his invasion has been fought for two decades or more in the Western hemisphere, Denver, Colorado has been a key headquarters of resistance since 1989, when the American Indian Movement of Colorado (AIM) embarked on a program to reveal the true Columbus and his legacy of suffering, both accounts largely absent from history books, and where a handful of dissenters swelled to thousands at the protests’ height.

But the Columbus Day parade in Denver this year was “small—it was no big deal,” said one police officer in a downtown office. Some potential parade-goers were unable to find the small gathering, observers said of the event that has been a focal point for anti-Columbus activists in the past.

In 1907, Colorado became the birthplace of the holiday but some of its citizens are not alone in objecting to the celebration today. In the last three years, and sometimes earlier, others have abandoned, renamed, revised or replaced Columbus Day. The entities include the National Congress of American Indians, Native American Rights Fund, Navajo Nation (which has replaced Columbus Day with an April 4 Navajo Nation Sovereignty Day), Confederated Tribes of the Colville Reservation, Tohono O’odham Nation, Saginaw Chippewa Tribe of Michigan, Jicarilla Apache Tribe, and Gila River Indian Community.

Cities that have changed their celebrations include Berkeley, California, which now celebrates Indigenous Peoples Day, Portland, Oregon and Duluth, Minnesota. A number of states have come on board as well including Alaska, South Dakota, which celebrates Native American Day, Hawaii, which celebrates Discoverers’ Day, Nevada, and Alabama. There are also several colleges and universities throughout the country that hold anti-Columbus Day events. Although Cherokee and Muscogee (Creek) nations’ tribal offices remain open on the holiday, the Osage Nation and United Keetoowah Band’s tribal offices close and the tribes refer to the day as Osage Day and Native American Day, respectively.

“For Native Americans, Columbus Day should not be a day of celebration,” said a Mississippi Choctaw Band Chief. “His arrival on our shores marked the beginning of centuries of exploitation of our people and our land. Much better that we should celebrate our rich culture and our traditions.”

“To me, I am really excited Gov. [George] Mickelson made the effort to change the holiday,” said Dani Daugherty, an attorney who works for the Bureau of Indian Affairs in Aberdeen, South Dakota. “The main reason is that I don’t think we should be honoring Columbus” since the records are “filled with atrocities,” she told the Aberdeen News.

The 350-member Gathering of Indigenous People in the Americas has, since 1992, referred to the day as the International Day of Solidarity with Indigenous People. Columbus has even had a major role in television’s “The Sopranos,” when Italians and American Indians traded jabs over his honoring. In public schools across the U.S., some parents’ complaints about the sugar-coated invasion go unheard, despite alternative curricula available.

Several anti-Columbus groups assembled today in the southern Colorado community of Pueblo, where the first parade honoring Columbus was held in 1905. From 100 to 150 people from Denver and other communities attended the peaceful gathering, which drew AIM and such other groups as Deep Green Resistance, Occupy Denver and people from the White Clay, Nebraska protest.

In key ways, the Columbus opposition is not conducting a war of aggression but a defensive action, says Glenn Morris, Shawnee, a professor of political science at the University of Colorado-Denver and a long-time AIM leader. “We’ve been under attack for 500 years but they’re making it sound like we’re attacking Italians and Italian culture. The legacy of Columbus is represented in the Doctrine of Discovery. What they’re celebrating on Columbus Day is not Columbus—what they’re celebrating is the Doctrine of Discovery, which benefitted them and dispossessed Indian people of 2 billion acres of territory.”

Robert Chanate, Kiowa, former tactician for AIM, said, “What we were really successful at was marginalizing the parade in Denver. Very few people attend the parade and it’s not a featured event like other city parades. Another fortunate outcome of our opposition to the holiday was the alliances we developed with other Indigenous Peoples and organizations. We were able to use the publicity of that day to call attention to various indigenous struggles that are happening in the present, not in 1492.”

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November 19, 2012

Winnebago Tribe Competes for Iowa Commercial Casino

Ho-Chunk Inc., the Winnebago Tribe’s economic development corporation, has submitted a bid to build a $122.3 million commercial casino and hotel in downtown Sioux City, Iowa.

The tribe is among three groups vying for the Iowa Racing and Gaming Commission’s (IRGC) Woodbury County gambling license. On November 15, Ho-Chunk, along with Sioux City Entertainment (SCE) and Penn National Gaming, provided proof they have the financial means to realize their proposed casinos, reported KTIV.com.

Names were drawn, and Ho-Chunk presented first. The corporation has secured $152.3 million in funding for its planned Warrior Casino and Hotel, including a $20 million investment from the Shakopee Mdewakanton Sioux Community (SMSC) of Minnesota, which Ho-Chunk CEO Lance Morgan called “probably one of the most successful gaming tribes in the country.” The SMSC operates Mystic Lake Casino in Minneapolis; the tribe has also agreed to provide a $9 million bridge loan for the proposed Iowa casino.

Ho-Chunk cited other investors as well as plans to use city tax increment financing for $25 million and debt financing for $58 million.

The extra $30 million in contingency funding stood to bolster the tribe’s pitch. “We wanted to show up here with no holes in this project,” CEO Lance Morgan told the commission, The Sioux City Journal reported. “We wanted to make sure you knew that we had more than enough resources for this project.”

The SCE, the developer of the proposed Hard Rock Hotel & Casino, along with the nonprofit gaming group Missouri River Historical Development, has identified as much as $138.5 million in funding through a mix of private and public financing for its $118.5 million project. Additional funds will provide “the opportunity to continue to grow, as we open the project, see what the demand is, and reinvest in the project, as opposed to having to stay static with the first phase of the project,” SCE President Bill Warner said.

The third contender, Wyomissing, Pennsylvania-based Penn National Gaming, the nation’s second-largest gaming operator, is proposing two casino options at more than $160 million each.

“Penn National requires no financing to move forward with our proposals and can fund either of these projects with cash flow from existing operations,” Penn chairman and CEO Peter Carlino said in a statement.

IRGC Chairman Jeff Lamberti said all three groups “met that minimum threshold.”

In January, the groups will make 45-minute detailed presentations on their proposals to the IRGC, and the commission will decide which company will receive the gaming license on April 18.

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