August 2004

Knight-Frank prepares to serve prison term

By Jim Mimiaga

Facing prison on a federal charge falsifying a tax return, former Ute Mountain Ute Tribal Chairman Judy Knight-Frank says her experience at the hands of the federal government has been a bitter one.

In an exclusive interview with the Free Press on July 29, she said she was unfairly singled out for prosecution just for doing things that were common practice on the reservation. “It was the way the tribe operated,” she said.

Knight-Frank, now 60, was indicted in 2002 on 11 charges stemming from payroll advances she received from the tribe and related matters. Knight-Frank originally pleaded not guilty to all 11, but agreed in March of this year to plead guilty to the one count.

At that time she also resigned as tribal chairman, a post she had held since 2001 and also from 1989-98.

She was sentenced in June to five months in federal prison and five months of home detention.

She told the Free Press she had little choice but to plead guilty because crucial records she needed for her defense were unavailable and that she did not really believe any of the charges were justified.

Four of the counts in the original indictment were for allegedly making false statements on loan applications, not reporting as outstanding loans the payroll advances she had received, which reportedly totaled $274,537 over a period from January 1996 to November 1999.

“According to federal law, if you have a loan and do not disclose it on a loan application for the bank, it’s like a big fraud because you might be denied the loan if they knew,” she said.

But, she said, the tribe and its staff always believed that tribal finances were a separate issue because of Indian sovereignty and such information did not have to be reported.

“ Since tribal members have always been told by their attorneys and the council that these laws over the reservation don’t apply, It’s been very confusing.”

She added that she doesn’t believe anyone else with the tribe reports money that they owe to the tribe, either. “I don’t think anybody on the reservation has ever done that because they say it’s tribal business, nobody else’s business,” she said.

“That’s what a lot of people don’t understand. They think the tribe can do whatever it wants and it cannot.” Although Indian nations are theoretically sovereign, she said, where tribal law and federal law conflict, federal law takes precedence.

That’s a fact that needs to be better-publicized among the tribe, she said, because more than 1,000 people, probably over 50 percent of the adult tribal members, have payroll advances.

Knight-Frank blamed staff members for granting her the payroll advances in the first place. “I guess maybe wrong advice was given by staff. They were the ones that made out the checks. There’s a process for approval and the finance officer is the main person in charge but I supposedly strong-armed them and demanded that the staff do it, which is all untrue.”

A rough period

Knight-Frank’s financial problems were reputed to have stemmed from a gambling addiction. She said that is only partly true.

She admitted she gambled extensively during that period of her life, but does not believe she has an ongoing addiction.

“I went through a process in my life where I lost my father, lost my mother, lost my sister, lost my brother,” she said.

“When I went through all those problems, that period of time, (gambling) was something that would take your mind off it. That time was one of the roughest periods in my life and that was a way of getting past that.”

She said she has been working on the problem and believes she’s past it.

“I told my husband, ‘If we go to Vegas, everybody gambles. Do they have an addiction? People go on trips or to meetings and drink with people, does that mean they’re drunks?’

“ I know that you’re not going to win millions or whatever, but it was something that I used to pass the time to get through that period. When you are on council and especially the chairman, you never have anything to yourself. People are on your doorstep seven days a week, 24 hours a day.”

Knight-Frank said not all of the money she received in the form of payroll advances went to the casino. Much of it was given to other tribal members who needed help, she said.

Sometimes, when a tribal member who didn’t have a job needed money, Knight-Frank would get payroll advances to help them out, she said.

“There are people that live off-reservation that don’t work that need some kind of assistance,” she said, adding that she would give it to them as a payroll advance and charge the money to her name. That money is part of the $365,000 she is alleged to owe, she said.

“There was a list of people that I assisted that way, dozens of people, and now I’m having to go to jail for that.”

Outright lies

Three of the original charges against her were for not reporting the payroll advances as income for tax purposes in 1996, 1997 and 1998.

“They said payroll advances, if not paid (back) within that year you get them, are considered income,” she said. “All federal laws do apply to Indians, so I was breaking the law (because) I didn’t pay taxes on it, whether it was my fault that I didn’t know it or whatever. There’s no sovereignty on that.”

But because the same money was being considered income for those charges and loans for other charges, some of the counts had to be dismissed, she explained.

She said some of the allegations against her were outright lies, such as that she had ordered the tribal construction company, Weeminuche, to build her a two-story home (“I live in a HUD house, and it’s not two-story,” she said) or that she had falsified travel expenses and was vacationing in Las Vegas when she supposed to be in a water meeting in Denver.

“The meeting was in Las Vegas,” she said. “I had minutes and everything that showed it. They were wrong, but they never check out anything.”

Also, she said, people who supported her were not allowed to tell their story. “What I’ve learned is that these people that might have had positive things to say about me were not listened to by the investigative people and they only brought out people that had something negative.

“This has really been a lesson to me in the justice of this country. I thought there was some justice but I think I found differently.”

Knight-Frank said she believes her prosecution was partly the result of tribal politics. She was elected chairman in 2001 by a single vote over Ernest House. She said some members of the tribal council were giving information to federal prosecutors and encouraging them to charge her with something so they could get her out of office. “The tribe was giving them everything they could on me,” she said.

Knight-Frank said she tried to subpoena tribal records to support her contention that much of what she’d done was common practice on the reservation, but ran into a brick wall.

At first the tribe refused to give her the records; then they said everything up until 1998 had been destroyed, she claimed.

Although she did eventually get boxes and boxes of papers, she said they weren’t ones that were relevant to her case. It was then that she decided to plea-bargain.

“How do you defend yourself? I was fighting the federal government, I was fighting the tribe, it’s been happening since the fall of ’98, it’s a lot of stress and I was trying to find a way to get on with my life.”

The remaining four counts were of theft and embezzlement from an Indian tribe, Knight-Frank said, and were dismissed.

Some of those allegations related to travel expenses, she said, but she was never given an opportunity to discuss them with the tribe. “I told that whatever travel I had done for 1998 was going to be turned in as income,” she said. “I had never had the opportunity to sit down with anybody to say these things are in question, can you say what’s going on. There was no due process, administrative or otherwise.” She said staff members were told not to talk to her for fear of losing their jobs.

‘A Communist country’

She charged that cronyism and favoritism dominate tribal operations and said there needs to be better oversight of finances, especially concerning income from the Ute Mountain Casino. Once operated by an outside management firm, it is now managed by the tribe and makes millions every year, she said.

“A lot of tribal members are asking where is the money going?” she said.

She also said the Ute Mountain Utes need more oversight of their elections – three candidates for the council were allegedly put on the ballot in October of last year without getting the required number of signatures, and one, Ernest House, was elected to the council [Free Press, December 2003].

“It’s just a Communist country, it’s like Nazism, that’s what’s down there,” she said. “You open your mouth and there goes your job. It goes back to our tribal council, they determine who gets the jobs and how much they get paid. If you’re on the outs or not a member of this family, you don’t get a job, things like that. We as individual citizens of this country should be afforded those rights and I don’t know if Congress will listen but they should do something about it, it’s not right.”

Knight-Frank said she hopes there will be changes made in this fall’s council elections, but whatever happens, she won’t be running for office.

“Our constitution says if you’re convicted of a felony, you’re not eligible to run.”

At the moment, she said, she is trying to pay back the money she owes despite no longer receiving per-capita income from the tribe. “They’ve been taking my per capita, I don’t get it today. They take anything they can get their hands on, annuities, whatever.

“Today they’re still holding my money, saying I owe them X amount of dollars. There’s a funny thing about it too, that amount never goes down no matter how much money they take from me.”

She said the entire experience has been disillusioning and disheartening. “It’s been a rude awakening, that’s for sure,” she said.