Attorney, retired professor accused of defrauding tribe
An attorney for the Twentynine Palms Band of Mission Indians and a retired Claremont McKenna College professor are among four people who have been indicted on federal bribery and money laundering charges, the U.S. attorney's office said Thursday.
Prosecutors allege that the defendants deprived the tribe 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.
The 48-count indictment, handed down Wednesday, is the result of a joint FBI and IRS investigation.
Those named are Gary Edward Kovall, 66, a Minnesota-based attorney who acted as legal counsel for the tribe; David Alan Heslop, 74, of Templeton, Calif.; Paul Phillip Bardos, 57, of Rancho Cucamonga, a general contractor; and Peggy Anne Shambaugh, 56, of Ely, Minnesota, who is Kovall’s wife.
The four will appear in United States District Court in Los Angeles on Friday.
According to the indictment, Kovall advised the tribe to create a limited liability company to purchase real estate, and then convinced them to hire Heslop as the company’s manager.
Kovall and Heslop recommended that the tribe hire Bardos to act as the tribe’s “owner’s representative” in several construction projects at the Spotlight 29 Casino, according to the indictment.
After he was hired by the tribe, he paid kickbacks to Heslop who, in turn, paid kickbacks to Kovall, prosecutors allege.
The indictment alleges that in 2007 Bardos paid Heslop more than $186,577, most of which was then 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. Atty. André 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."
The indictment charges all four defendants with conspiracy. Kovall, Bardos and Shambaugh are also charged with multiple counts of bribery and money laundering.
If convicted of all charges, Kovall faces up to 75 years in federal prison and a $2-million fine; Heslop faces 225 years in federal prison and a $5.75-million fine; Bardos faces 155 years in federal prison and a $4-million fine; and Shambaugh faces 105 years in federal prison and a fine of $2.75-million.
-- Richard Winton