GREAT FALLS, Mont. (AP) - Three people pleaded guilty Friday to charges filed in the defrauding of a federally funded program meant to help Blackfeet Indian youth.
Francis Onstad of Valier and Delyle “Shanny” Augare of Browning entered the pleas in U.S. District Court in Great Falls to conspiracy to defraud the U.S., conspiracy to submit false claims, embezzlement from a federally funded program and income tax evasion.
Onstad, 61, was the director and Augare, 58, the assistant director of the Po’Ka Program, which ran from 2005 to 2011.
Dorothy May Still Smoking, 64, of Browning pleaded guilty to conspiracy to submit false claims.
Sentencing for all three was set for June 5. Prosecutors have agreed not to seek more than $1 million in restitution from each defendant.
The project received $9.3 million from the U.S. Department of Health and Human Services over six years starting in 2005, with the intention that it become a reservation-wide children’s mental health system supported by the Blackfeet tribe without federal assistance.
To do so, the tribe was supposed to increase its in-kind contributions to the program over the life of the grant from $1 for every $3 of federal funding to $2 of tribal contributions for every $1 of federal money in 2010 and 2011, said Michael Cotter, U.S. attorney for Montana.
Instead, the program’s leaders doctored claims, records and invoices to make it appear as though they were meeting those obligations and to keep the federal money flowing to the project, prosecutors said.
Prosecutors alleged that Onstad and Augare sent $475,000 in grant money to a business owned by Gary Conti, a former Oklahoma State University professor who was hired as the project’s national monitor. Prosecutors allege Conti kicked back about $231,000 of that to an account from which over $225,000 was transferred to personal accounts belonging to Onstad and Augare between September 2008 and September 2011.
The income tax evasion charge alleges Onstad and Augare did not report the transferred money as income.
Conti has pleaded not guilty to about two dozen counts, including fraud, conspiracy to submit false claims, theft, money laundering and bankruptcy fraud in a 2009 case in Oklahoma. His trial is scheduled to begin Tuesday in Great Falls.
Conti told FBI agents the money he returned was meant to be a donation to the Blackfeet community, court records said.
Another co-defendant, Katheryn Sherman, is expected to plead guilty Monday to conspiracy to submit false claims, federal prosecutors said.
Former Po’Ka project administrative assistant Charlotte New Breast, 53, pleaded guilty to aiding and abetting theft from an organization receiving federal grant money. She was given a probationary sentence in February and ordered to pay $50,000 in restitution.
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