Rolling Hills Casino, Northern California

Rolling Hills Casino in Northern California: the scene of a cyber-attack and an armed standoff following the ousting from power of the controlling tribal faction. (Image: glenncounty.com)

A tribal faction that once controlled the Rolling Hills Casino near Corning in Northern California engaged in a “12-year looting spree” and plundered the casino for tens of millions, according to a lawsuit.

The complaint states that former tribal officials of the Paskenta Band of Nomaki Indians frittered away the tribe’s money on “absurdly luxurious lifestyles of private jet travel, luxury homes, high-end vacations, custom sports cars and high-profile sporting events.”

“The casino is the primary source of the tribe’s income,” the lawsuit states. “The income the tribe has derived from the casino over the last 12 years has made a dramatic difference in the lives’ of the tribes members and has continued to improve their standard of living.”

The 171-page complaint includes claims under the federal Racketeer Influenced and Corrupt Organization Act (RICO) and names 19 defendants, who controlled the casinos finances from 1998 until 2014, when the faction was ousted. Four defendants are named as ringleaders of the group: the first is a former Sacramento FBI agent John Crosby; his mother, Ines Crosby, the former tribal administrator; her sister, Leslie Lohse, the former tribal treasurer; and her husband, Larry Lohse. They are accused of embezzlement and misuse of company funds.

Fools’ Gold

A recent audit revealed the extent of the misuse of funds: $17 million had been spent on private jet travel and over $1 million on tickets for Sacramento Kings basketball games. Meanwhile, $93 million had been invested in gold, real estate and “unproven, high-risk startup companies.”

On June, two months after it had been toppled from power, the faction launched a cyber-attack on the casino’s systems before attempting to retake control of the property by force, resulting in a weeklong armed standoff.

“In April 2014, in an impressive and inspiring expression of self-determination and democracy, the tribe came together and removed the RICO Ringleaders from power,” the lawsuit states. “The Rico Ringleaders did not, however, go quietly.

Armed Assault

“In an effort to both retake control of the tribe and prevent discovery of their criminal enterprise and the illegal benefits that they derived from it, the RICO defendants launched an armed assault on the tribe’s Rolling Hills Casino in coordination with a destructive cyberattack on the casino and tribe’s computer systems.

“The RICO defendants intended these attacks to shut down the casino – far and away the most significant source of income for the tribe and its members – to force the tribe to allow them back in control, essentially using the economic welfare of every other tribe member as a hostage. They further intended to, and did, destroy electronically stored information that could be used as evidence of their years of criminal activity.”

The Rolling Hills Casino opened in 2002 and generates $100 million annually, providing $54,000 a year for each member of the 300-strong band.