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HUD Archives: News Releases

HUD No. 98-137
Further Information:For Release
In the Washington, DC area: 202/708-0685Monday
March 30, 1998Stan Vosper


The Secretary of Housing and Urban Development, Andrew Cuomo, Montana's United States Attorney, Sherry Scheel Matteucci, and HUD Special Agent in Charge Jeffrey S. Finn announced that a federal indictment was unsealed today under which eleven individuals and two corporations are charged with bribery, theft and fraud involving a program that brought $5.5 million in housing assistance to the Blackfeet Indian Reservation in Montana through HUD's HOME program. Under the program, funds are provided to federally recognized Indian tribes and Alaskan Native villages to meet affordable housing needs.

William Harvey Aubrey, Blaze Construction, Inc., Lodgebuilder Management, and ten other individuals were indicted by a federal grand jury in February, 1998 on charges of fraud, unlawful conversion of federal funds, bribery of federal officials, conspiracy and theft from a tribal organization. In addition to Aubrey and the two corporations, the defendants include: Gloria Dale Lewis, Brenda Bernadette Todd, Scott F. Sherburne, Cynthia Cecile Kipp, Aloysius Paul Potts, Marlene June Bear Walter, Joseph J. McKay, Lee Roy Wilson, Donald Lee Wilson, and Colleen Catherine Wilson. All defendants except Gloria Dale Lewis and Brenda Todd appeared for arraignment before United States Magistrate Judge Richard F. Cebull today in federal district court in Great Falls, Montana and entered not guilty pleas. No trial date has been set.

The investigation began with a tip by a Blackfeet loan officer to the Department of Interior's Office of Inspector General who forwarded the information to HUD. Agents and an auditor from HUD's Inspector General's office in Denver have worked jointly with the Federal Bureau of Investigation, the U.S. Department of Interior's Office of Inspector General and the Internal Revenue Service. The investigation is continuing and additional indictments are expected.

"This is one more example of HUD's continuing commitment to work in partnership with the Justice Department and the U.S. Attorneys around the country to crack down on waste, fraud and abuse in every one of our programs," Cuomo said. "HUD will not allow impoverished Native Americans to be robbed of HUD assistance that is rightfully theirs."

As a result of the investigation and indictment, Cuomo said HUD has begun debarment action and is immediately suspending the defendants from participating in any new contracts where federal money is involved until the case is resolved.

In October 1992 the Blackfeet Tribe was awarded $5.5 million in HOME funds through HUD's Office of Native American programs, now headed by new director Jacqueline Johnson. Cuomo said that under Johnson, "the Office of Native American Programs is moving forward aggressively to implement new management systems and new financial oversight and enforcement mechanisms to ensure that all money designated for Indian housing is used wisely and effectively." He noted that "at HUD's Office of Native American Programs we are setting new standards of performance and accountability and where there is fraud or mismanagement in Indian housing, we will find it and put a stop to it."

Matteucci said "this joint investigation is a fine example of the effectiveness of cooperative effort among federal law enforcement agencies." Finn stated his belief that "this indictment will send a strong message to those involved with HUD programs that dishonesty and misappropriation of federal funds will not be tolerated" and expressed his commitment to dedicating the investigative resources of his office to similar investigations.

The indictment charges that Aubrey entered into contracts with the Blackfeet Tribe for Blaze Construction to build 72 new homes. Blaze Construction is one of the largest contractors doing work on Indian reservations in the country. Only 51 homes were actually built but all funds were released to the contractor and most of the homes that were completed were substandard. According to the indictment, Blaze and Gloria Dale Lewis, the former director of HUD's Indian Housing and Community Development Division in Denver, conspired to have the grant awarded to the Blackfeet Tribe and the construction contract awarded to Blaze Construction. In addition the indictment charges that several current and former members of the Blackfeet Tribal Business Council received bribes in the form of money and HUD homes which were given to relatives of certain tribal council members.

The case will be prosecuted by Assistant United States Attorney Carl Rostad in Great Falls. Matteucci also noted that an indictment is "a statement of charges only; the defendants are presumed innocent until judged guilty in a court of law."

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