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Tribal Organization: St. Croix Chippewa

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777 US Highway 8/63
Turtle Lake, Wisconsin 54889

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This Saint Croix Casino is located on U.S. Highway 8 in Turtle Lake. It is 90 minutes northeast of Minneapolis-St. Paul and 90 minutes northwest of Eau Claire, Wisconsin.

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At least $1.5 million in casino funds were pocketed by St. Croix Chippewa tribal leaders, or used for a variety of expenses including trips to Hawaii and Las Vegas with little or no documentation or receipts, federal regulators said this month.

'The dollar amounts are staggering,' said Eric Dahlstrom, an Arizona attorney with about 40 years of experience in Indian legal issues. 'I certainly haven't seen (a Notice of Violation) as large as this. ... Tribal gaming funds are strictly regulated and should be used to provide badly needed government service and build infrastructure.'

Among the payments listed in the National Indian Gaming Commission's Notice of Violation were 74 totaling $154,173 that went to Lewis Taylor, longtime chairman of the tribe, from 2014 to 2017. Tribal Council member Elmer 'Jay' Emery received 94 payments totaling $235,888 during the same period, the agency charged.

In addition, the regulators said that from 2015 to 2017, the St. Croix Casino Turtle Lake issued 275 payments totaling $562,246 to seven tribal members.

All told, the 29-page Notice of Violation lists 527 violations of the federal Indian Gaming Regulatory Act, NIGC regulations and tribal ordinances. The notice states that each violation could result in a fine of $52,596, meaning the total fine could exceed $27 million.

Regulators paint a picture of sloppy bookkeeping where casino cash was tossed around freely and without documentation.

'Many of the payments — worth hundreds of thousands of dollars — were issued to the same small group of people, often with the only supporting document being a request for disbursement form with the words 'travel' or 'consulting fees' scrawled into the comments section,' the notice signed by NIGC Chairman Jonodev O. Chaudhuri states. 'Upon further questioning by NIGC investigators, the tribe was unable to produce documentation to support treating the payments as expenses of the gaming operation.'

The seriousness of the charges prompted the agency to bypass its normal procedure of issuing a concern letter before a notice of violation is fired off.

'In this case, however, given the pervasiveness and serious nature of the violations, coupled with the fact that many of the individuals identified in the Notice of Violation are still in a position to direct casino and net gaming revenues, the chair has decided to proceed directly' and issue the notice, the document states.

Rory Dilweg, a California lawyer who has more than 20 years of experience in Indian legal issues, said the notice could spark other probes.

'The NIGC has documented over $1.5 million in unaccounted funds. This is very serious,' Dilweg said in an email that noted the NIGC 'could issue a closure order for the Tribe’s casinos.'

On top of that, he said 'there could also be action taken by other agencies such as the FBI, the IRS, and Wisconsin Department of Revenue.'

About 2,000 people live on the St. Croix reservations in Barron, Burnett, Polk and Washburn counties. The St. Croix Casino in Turtle Lake employs about 1,000 people and the tribe's Hole in the Wall Casino in Danbury employs about 200, according to the Great Lakes Inter-Tribal Council.

Calls to Lewis Taylor; Jeff Taylor, chairman of the tribe’s Gaming Commission; and officials in the tribal attorneys office were not returned Thursday. Aaron Harkins, a Minneapolis attorney who represents the tribe on some issues, said, 'I can't comment on anything involving this client.'

The tribe can appeal the findings in the notice to the full NIGC.

The notice leaves little hope that the tribe could undo the damage. 'There is no way to correct these violations, but (Chairman Chaudhuri) will consider the tribe's efforts taken to mitigate damages when determining an appropriate civil fine,' the notice states.

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Other violations listed in the notice include:

• From 2015 to 2017, the Turtle Lake casino paid $301,287 in consulting fees to Lawrence Larsen 'without any support (i.e. contract, invoice receipts) for goods or services provided by Larsen.' Regulators provided no additional information about Larsen and noted that tribal officials could not produce a contract with Larsen or 'provide a written description of the terms of any oral agreement' with him.
• In 2017, Larsen was paid $12,746 for travel. Larsen received payment twice for the same trips but provided receipts for only one trip. A February 2017 request of disbursement form shows three first-class trips for Larsen to fly from Honolulu to Los Angeles, Los Angeles to Seattle and Seattle to Atlanta.
• Council member Emery used a casino credit card to purchase four first-class plane tickets to Hawaii in 2016 even though a tribal travel ban enacted in 2014 was still in effect. The ban was enacted in 2014 to deal with 'the challenge of meeting its financial obligations in an economic climate which yields diminished revenue streams,' according to a council resolution.
• In December 2016, the Turtle Lake casino cut $10,000 checks to Lewis Taylor and the four council members. The request for disbursement for the council members stated 'Travel to Las Vegas Legal Symposium.' Taylor's disbursement form said 'Travel AZ Legal Symposium.' The checks were cut before the trips and there is no supporting documentation or receipts available.
• Two council members — Stuart Bearheart and Carmen Bugg — each received $15,000 for a 'project allocation,' the regulators noted. The tribe was unable to provide regulators with a description of the project.

State and federal officials declined to say whether there were any criminal investigations as a result of the NIGC report.

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Contact Cary Spivak at (414) 223-5467 or cspivak@jrn.com. Follow him on Twitter at @cspivak or Facebook at https://www.facebook.com/cary.spivak

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