Chukchansi tribal group says casino money never disappeared

The Fresno BeeFebruary 27, 2014 

The front entrance and the water feature are seen at Chukchansi Gold Resort & Casino.


The "on rancheria" tribal council of the Chukchansi Indians says that over $300,000 in casino money that a competing faction contended was not properly placed in a bank account in fact did not disappear.

A temporary restraining order affidavit filed last week by the Reggie Lewis tribal faction said that $316,017 was counted twice, returned to the casino at the direction of a management employee and later turned up missing.

The order asked that certain casino management employees be prohibited from making payments with casino money, but a U.S. District Court Judge in Fresno said he did not have the jurisdiction to support the Lewis group and said he didn't think the group had power over what occurred at the casino.

The Lewis group said the money had to be deposited in a Rabobank account that pays the tribe's casino debts to follow a New York judge's ruling.

The two sides have been battling for control of the tribe for a year. Earlier this month, the Bureau of Indian Affairs supported a group dating back to the 2010 election. Lewis was a member of that group. The BIA's ruling is pending an appeal.

But the faction on the rancheria, led by Tex McDonald, contends that his group rightly deposited the money in a bank account, said David Leibowitz, the group's spokesman.

"The money is in a tribal account that comports with the (New York) judge's directive," Leibowitz said. "The money has never disappeared ... the money was never unaccounted for."

He said the money is not in the Rabobank account, but was "deposited in accordance with the law." He would not say where the money was deposited.

"The money is in the appropriate tribal bank account, per the judge's orders," Leibowitz said. "No council member or gaming commission member has received a single penny from those funds."

An affidavit signed by a Rabobank lawyer and provided to the Lewis group said the money didn't go in the required Rabobank operating account. That account is used to pay off the $250 million restructured debt of Chukchansi Gold Resort & Casino, near Coarsegold.

A lawyer for the Lewis faction said money from the casino must go into the Rabobank account and that under the New York judge's ruling both groups must agree on bill payments.

"The violation occurred because the money didn't go into the Rabobank account and the Lewis group didn't agree to any disbursements from the casino," said Richard Verri, a lawyer who represents the Lewis group.

In July, a New York judge said the Rabobank account that was controlled by the Lewis faction had to be available for deposits by the McDonald faction, which was then led by Nancy Ayala. The Ayala group had to close its accounts in other banks and shift money held in the casino and by a third financial institution into the Rabobank account.

The judge's July order ended a 3-month-old stalemate over the bank accounts between the competing groups. It allowed Rabobank to pay the hotel's twice-annual $12 million interest payments to bondholders.

The judge's order also gave both sides veto authority when checks are written. But the judge said that "neither the Lewis faction nor the Ayala faction shall have any independent authority to direct the deposit or withdrawal of funds from the Rabobank operating account."

The reporter can be reached at (559) 441-6166, or @beebenjamin on Twitter.

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