You have permission to edit this article.
Edit

Embezzlement Drives Apache President's Recall

From the A Year in Dulce: The SUN's 2018 Coverage of the Jicarilla Apache Nation series
  • Updated
  • 4
  • 6 min to read
Dulce

A petition for the impeachment of Jicarilla Apache Nation President Levi Pesata states he demonstrated “misconduct reflecting on the dignity and integrity of the Tribal Council, and gross neglect of the duty and breach of his Constitutional Oath to protect members of the Jicarilla Apache Nation.” He addressed crowds at the 2017 Indigenous Peoples Day celebration in Santa Fe.

    Jennifer Muskrat climbed into the backseat of a mini-van parked on the east side of the Ishkoteen Judicial Complex in Dulce at 10:30 p.m., Aug. 1.

    She, along with two other women and a man, drove off into the dimly lit roads of the reservation to collect last-minute petition signatures in preparation for the next day’s Jicarilla Apache Nation Tribal Council meeting.

    They sought signatures on three petitions: One for the impeachment of President Levi Pesata, the removal of Council Member Sheryl Vigil and the removal of Nation Comptroller Chad Eaton.

    Vigil is Eaton’s mother. Eaton is a non-tribal member.

    Muskrat got home at about 2 a.m., with pages of signatures crinkled from being passed around the community.

    She and her mother Bernice Muskrat planned to ask the Council to vote for the immediate removal of Pesata, Vigil and Eaton.

    The Muskrats started petitioning after they learned the results of 2017 forensic audit of the Apache Nugget Casino, located just north of Cuba in Sandoval County.

    According to the forensic audit, Eaton embezzled thousands of dollars in Tribal funds while he was chief financial officer of the Casino. A letter from the Apache Nugget Corporation Board of Directors, dated Nov. 17, 2017, explains how a web of Eaton’s friends, family and supporters either benefited from the embezzlement or tried to stymie efforts by the Board and other Tribal regulatory agencies to expose his illegal and questionable spending. The letter was addressed to the Nation’s Legislative Council.

    Pesata did not return messages by press time inquiring about the audit. Eaton did not return messages by press time, requesting an interview. Vigil did not return telephone messages, by press time, inquiring about the audit.

    Board Chair Travis Chavez did not return a telephone message, by press time, inquiring about the letter.

    The night before the Aug. 2 Legislative Council meeting, about 20 people tucked inside a small, beige room off the rotunda of the Judicial Complex devised a plan for presenting their petitions.

    The room was quiet, but the frustration came through in people’s voices as they discussed the audit findings.

    While the majority of people did not want to be identified in this story, Bernice Muskrat spoke freely. She stood in front of the room, her bags overflowing with legal documents, copies of the forensic audit and a copy of the Nation’s constitution.

    “We know how it is supposed to work, but we have been kept by fear and the economic dependence on the tribe has a lot to do with how we do things,” Bernice Muskrat said to the group. “Our generation is always in hiding. You can’t get them out to say anything. But I noticed by going through these petitions that mostly young people signed it, you know. And they also go on the media. The social media — Facebook. This really helps because they were able to unite a lot of people.”

Eaton’s history

    Eaton’s employment was contentious from the get-go.

    In 2012, Pesata issued a directive stating the Council wanted Eaton hired as the chief financial officer of the Apache Nugget Casino. Although the Corporation Board’s charter does not authorize hiring by directive, Eaton got the job.

    “The Board felt that it had no power to challenge the Legislative Council and the President, so Chad Eaton was reluctantly hired,” the Board’s letter states. “ANC started losing money thereafter, and questions about Chad Eaton’s expenditures and activities came under scrutiny, resulting in his abrupt resignation (in 2016.)”

    Around the time of his departure, the Legislative Council began questioning the Board about a decline in Casino revenues, according to the Board’s letter. The Jicarilla Apache Gaming Regulatory Commission also asked questions about Casino operations, “including questions about the past use of credit cards and various personal expenditures, including those of former CEO Chad Eaton.”

    The letter states the Board requested the Regulatory Commission conduct a forensic audit of Casino finances, but they refused. Instead, the Casino paid for the audit. The letter does not state how much it cost.

    Eaton’s sister, Melissa Eaton, is the chair of the Commission.

    She was unavailable to comment for this article, as she is out of the office until Aug. 13, a Gaming Commission secretary said.

    The audit was released on Nov. 1, 2017 and was given to Pesata, the Legislative Council, the National Indian Gaming Regulatory Commission, the U.S. Attorney’s General Office and the Inspector General, according to the Board’s letter. A draft of the audit, released in October, was provided to the Nation’s criminal investigator.

    Soon after its release, Vigil, along with other Council members, attempted to pass a resolution disbanding the Casino’s Board, but Pesata did not sign the resolution.

    “Directors believe that their removal is in direct retaliation against them for doing their jobs and in particular for authorizing a forensic audit to analyze why ANC (Apache Nugget Casino) — and thus the Jicarilla Apache people — lost tens if not hundreds of thousands of dollars in the past few years,” the Board’s letter states.

    In 2017, Pesata made Eaton the comptroller of the Nation, and he remains in that position to this day.

Audit

    Albuquerque-based certified public accounting firm Atkinson & Co. LTD conducted the audit of the Apache Nugget Casino.

    The auditors were provided with records from 2015 and 2016. They did not receive records from 2012, 2013 and 2014.

    Soon after he was hired in 2016, Eaton employed his father’s construction company Eaton Contracting, Inc. to build a Casino event center.

    According to the audit, the initial bid for the project was $450,862. By the time contractors finished construction, the costs rose to $588,438.

    A former Board member said they were told the Casino received three bids and the Eaton, Contracting, Inc. bid was the lowest.

    “Other interviews uniformly indicated that no procurement procedures were followed on this matter,” the audit states.

    Through interviews, auditors also learned Eaton and his family used the new events center to host his daughter’s graduation party. Although he catered the event, he did not pay rental fees, for the band or staff.

    In 2015 and 2016, the Casino had over $114,000 in printing expenses. Although the majority of these expenses were for brochures and mailing, it is possible that some of that money was illegally used to print election posters.

    Consultant Shawn Carlson was hired to market the Casino and received $150,000 for his services over one-and-a-half years. According to staff interviews, Carlson and Eaton were personal friends.

    Auditors reviewed payment orders and invoices for his services, but “did not identify any deliverables” from him.

    During the same time period, the Casino spent another $400,000 on other marketing expenses, including two marketing staff salaries, newspaper and Facebook ads.

    Despite the money spent on marketing efforts, Casino revenues did not increase during the time Carlson worked there.

    It is possible kickbacks occurred.

    “It would have been very easy for the CEO to arrange this contract and to receive a portion of the monthly fees from it,” the audit states. “It would be very hard to detect such a kickback as it would be outside the records of ANC. We advice ANC that there is a high risk of fraud about this arrangement.”

    Auditors also found $14,501 in probable personal expenditures, $1,242 in unauthorized and undocumented fuel charges and $2,483 of not fully documented business meals, which included meals for children.

    “Using information from interviews and the listed items, the CEO used ANC credit cards for personal purposes and bought personal items, charged meals for himself and on occasion his family, charged fuel for his personal purposes, went to Albuquerque on the weekend various times with the family, went golfing, fishing and attended sports events, purchased items from Amazon and on occasion went to Las Vegas, NV.”

    These expenses included a $1,058 purchase at a Ross in Albuquerque; a $1,867 purchase from Best Buy, for which no receipt was provided; $1,084 at Hard Rock Hotel in Las Vegas, Nev., for which no receipt was provided; $2,200 for an event and travel to Las Vegas, Nev., for which no receipts were provided; and $2,010 in unsupported expenses from the Amazon Marketplace.

    Casino General Manager Martha Loretta’s credit card was also used to purchase about $200 in Arizona Cardinals football tickets and charged about $250 for purchases at Wolf Creek Ski Area in Pagosa Springs, Colo.

    In total, Eaton’s spending and hiring had a $1.3 million effect on the Casino’s cash balances and a $744,792 effect on Casino profits.

    The New Mexico Gaming Control Board, as well as Commissioner Jeffrey S. Landers, did not return calls, by press time, inquiring about forensic audit and their involvement in the investigation with the tribe.

    Bernice Muskrat said she submitted a legislative subpoena for a copy of a check for an insurance deductible payment to cover the casino's financial losses, which she said she has not yet received.

    According to the petition to impeach Pesata, he “actively met with lawyers of the Nation, and assisted Sheryl Vigil and her son Chad Eaton in avoiding prosecution or restitution” by paying an insurance deductible.

    According to the U.S. Code for the embezzlement and theft from Indian tribal organizations, a person who embezzles or inappropriately spends tribal money can be imprisoned for up to five years and fined. If the misuse is no more than $1,000, the person can be fined or imprisoned for up to one year.

Legislative council

    Jennifer Muskrat said they did not give the petitions to the Legislative Council because they failed to reach a quorum.

    Members Williams E. Muniz, Ronald Julia and Shane Valdez did not attend the meeting.

    While she would not provide the exact number of petition signatures collected, she said they gathered more than the 25 percent of registered voter signatures needed to start the recall process, as required by the Nation’s constitution.

    Although no vote occurred, people at the meeting addressed the Legislative Council, she said.

    “It was a very, very powerful, powerful meeting in the sense that even some of the other elders stood up and called Levi by his traditional name and said, ‘Look, look at what you did to us,’” she said.

    Chad Eaton did not attend the meeting. Instead, his wife Roxy Eaton spoke on his behalf, Jennifer Muskrat said.

    The group set ground rules for next Legislative Council meeting, Aug. 9, when they expect to deliver their petitions. Pesata and Vigil will not be allowed to attend.

    “This is not a fight against non-tribal (members) or any families,” Jennifer Muskrat said. “This is a fight about three individuals, conspiring and not holding another individual accountable and the fact that we entrusted our leadership to speak for us and stand for all of us equally.”

(4) comments

Gfisher

Excellent article Martinez even though I'm sorry for the people and I hope in time things heal and get good again..

DEPLING1176

Unfortunately, the alarming level of corruption reaches the Police Department as well. The JAPD leadership is participating in or allowing the coverup of many egregious activists...when a Police Department "leads" by intimidation, overlooks blatant acts of misuse, misappropriation and/or unqualified use of Department resources, the results are devastating. When Officers violate the 4th Amendment Rights of juveniles and nothing is done, the trust vanishes. And when Officers who speak up about the many unethical, immoral and illegal activities, the only thing that happens is retaliation for doing the right thing. The Nation as a whole has allowed so much wrongdoing, nepotism and unethical/illegal behaviors to occur it's become like a wildfire. And the Nation chooses to not address it, for whatever reason, and tries to portray a "we are PERFECTLY fine community, not addressing the issues that are literally destroying our community. Having a criminal Investigator that works harder at NOT doing his job, lies to the victims of crimes, initiates illegal and/or unwarranted investigations in order to "keep others from speaking up", causes not only division and mistrust within the Department, but also the community as a whole. When nepotism is so rampant that an officer's civil rights violations against children are overlooked or swept away, the damage to our community is overwhelming. And with this, and so much more, taking place and the leadership in place wanting to just keep getting a paycheck, thus, does nothing, it's time for outside investigations to take place...its time the world outside the boundaries of the reservation sees how corruption has taken over, lawlessness reigns and justice does not happen.

mlorene262

Apparently the tribal police is rounding up the Legislative Council members to address the people. Something brewing at the Council Chambers at this moment. Media coverage would be a plus.

NABM2007

The level of corruption, and coverup, extends to the Jicarilla Apache Police Department as well. Dereliction of duty, illegal investigations, violating the 4th Amendment of juveniles, just to name a very few, permeates from the leadership at the Police Department. Officers who speak up against unethical and/or illegal activity within the Department become the target of egregious retaliation.

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.