Tribe’s lawyer charged by feds in money laundering scheme
An attorney for the Twenty-Nine Palms Band of Mission Indians is among four people facing federal bribery and money laundering charges stemming from an alleged scheme in which employees kicked back about $185,000 to the lawyer and his wife, prosecutors announced today.
“The charges allege the defendants in this case deprived the victims — the Twenty-Nine Palms Band of Mission Indians — of honest leadership, and took advantage of their positions of trust by lining their own pockets with the tribe’s money, including government funding designated for necessary services,” said Steven Martinez, assistant director of the FBI’s Los Angeles field office.
The 48-count grand jury indictment returned Wednesday names:
— Gary Edward Kovall, 66, of Ely, Minn., a licensed California attorney who acted as legal counsel for the tribe;
— David Alan Heslop, 74, of Templeton, who on Kovall’s recommendation was hired by the tribe to oversee tribal business;
— Paul Phillip Bardos, 57, of Rancho Cucamonga, a general contractor; and — Peggy Anne Shambaugh, 56, Kovall’s wife.
According to the indictment, Kovall advised the tribe to create a limited liability company to purchase real estate and convinced the Indians to hire Heslop as the company’s manager. Kovall and Heslop then recommended that Bardos be hired to act as the tribe’s “owner’s representative” in construction projects at the Spotlight 29 Casino in Coachella, prosecutors allege.
When additional construction or construction oversight became necessary in relation to casino projects, Bardos submitted proposals to perform the work, and Kovall persuaded the tribe to give Bardos the contracts, according to the indictment.
After being paid by the tribe, Bardos allegedly paid kickbacks to Heslop who, in turn, paid Kovall though Shambaugh.
The indictment alleges that in 2007, Bardos paid Heslop more than $186,577, most of which was funneled to Shambaugh.
“The United States Attorney’s Office is committed to the prosecution of corruption and fraud in all of their guises,” said U.S. Attorney Andre Birotte Jr. “This case demonstrates that our commitment extends to vigorously pursuing cases against unscrupulous individuals who abuse their positions to take advantage of Native American tribes.”
All four defendants are charged with conspiracy. Kovall, Bardos and Shambaugh are additionally charged with eight counts of bribery, while Heslop is charged with 16 counts of bribery.
In addition to the conspiracy and bribery charges based on the alleged kickback scheme, Bardos is charged with eight counts of money laundering and Heslop and Shambaugh are charged with seven counts and two counts,
respectively.
If convicted of all counts in the indictment, the defendants each face multi-year prison sentences and fines up to nearly $6 million, prosecutors said.
