Guilty: Former Paskenta Tribal Leaders Admit Stealing Casino Money to Fund Extravagant Lifestyles

Posted on: August 16, 2019, 09:08h. 

Last updated on: August 16, 2019, 09:08h.

Three former tribal leaders in the Paskenta Band of Nomlaki Indians in Northern California pleaded guilty Thursday to embezzling nearly $5 million from its Native American casino.

tribal leaders casino theft guilty
Once owned by the Paskenta Band of Nomlaki Indians, this Cessna 560 jet was sold after three former tribal leaders pleaded guilty to stealing casino money to pay for travel on the plane and other luxurious expenses. (Image: Flight Aware)

John Crosby, 56, his mother Ines Crosby, 76, and Leslie Lohse, 64, admitted in federal court that they stole $4.9 million from the Rolling Hills Casino Resort. They accepted charges of “conspiracy to embezzle or steal from a tribal organization,” as well as tax fraud and tax evasion offenses.

“The defendants used the Tribe’s accounts as their personal piggy banks,” IRS Criminal Investigation Special Agent Kareem Carter declared. Carter added, “For at least five years the defendants took more than $4.9 million of the Tribe’s money and intentionally failed to declare it as income to the IRS. This resulted in a tax loss of over $1.6 million.”

Court documents detailed how the three, from January 2009 through May 2014, used the positions within the tribe to embezzle money from the casino. At the time, John Crosby served as the tribe’s economic development director, while his mother was the tribal administrator. Lohse is Ines’ sister, and assisted in the scheme.

Located roughly 110 miles north of Sacramento, the Rolling Hills Casino features 800 slot machines and several table games.

Lavish Lifestyles

Authorities say the three now guilty former tribal leaders lived the good life while swindling the casino money.

John Crosby used $838,000 to buy a house, and spent another $150,000 on precious metals and gold coins. Ines had an $85,000 koi point installed at her residence, and decided a $93,000 car was in her budget. Lohse paid down $30,000 in credit card debt.

The Crosby family also took trips on a private jet owned by the tribe at costs that soared over $100,000.

These individuals diverted millions from tribal accounts, funds intended to help tribal members, for extravagant, unapproved travel and personal luxuries,” FBI Sacramento Special Agent in Charge Sean Ragan added.

The three defendants will be sentenced by US District Judge Morrison England Jr. on January 30, 2020. They each face a maximum of five years in prison, plus fines and restitution.

Tribal Thefts

It’s been a string of bad luck recently for Native American casinos that have been victimized by crooks.

Earlier this month, federal prosecutors in Florida brought charges against four casino employees who allegedly tampered with slot machines to illegally win more than $5 million. The Miccosukee Resort & Gaming property – located about 20 miles west of downtown Miami – is where law enforcement say the theft occurred.

The defendants have entered not guilty pleas and the case is ongoing.

Also this month – a former council member of the Winnebago Tribe of Nebraska was given three years of probation after pleading guilty to stealing more than $300,000 from the Native American group’s WinnaVegas Casino Resort in Iowa.

Finally, in April, the National Indian Gaming Commission issued a Notice of Violation against the St. Croix Chippewa Indians of Wisconsin on claims that the tribe improperly spent $1.5 million, mis-accounted for, or used the cash for personal expenses.