Sixth administer sentenced in Blackfeet fraud case

Fraud involved program aimed at helping at-risk youths

The last of six administers of a federal program intended to help troubled and at-risk children on the Blackfeet Indian Reservation was sentenced in U.S. District Court in Great Falls.

Gary Joseph Conti, 68, of Three Forks, a former Oklahoma State University professor who was part of a multi-million dollar tribal corruption and fraud case, was sentenced to five years in federal prison and $1.7 million in restitution.

U.S. District Court Judge Brian Morris also sentenced Conti to three years of supervised release and $2,700 in special assessments. Conti was allowed to voluntarily surrender to prison when a facility is designated.

Conti was convicted of bankruptcy fraud by a federal jury in March and of 26 other felony crimes by a second federal jury in May. He was convicted of assisting Blackfeet Tribal officials Frances Onstad and Delyle “Shanny” Augare, and others, obtain millions of dollars in federal monies for a program for troubled and at risk Blackfeet youth called the Po’Ka Project.

The federal money was provided based on fraudulent claims as to matching or “in-kind” contributions of third parties, which made it appear that the project was becoming self-sufficient.

Once the federal money was provided to the Po’Ka program, Onstad and Augare paid Conti $475,000 over a three year period — from August 2008 to August 2011 — of which Conti kicked-back $225,000 through a children’s charity bank account over which Augare and Onstad had control.

An audit by the Department of Health and Human Services Office of Inspector General found the projected loss due to fraud and mismanagement at $4.6 million out of the $9 million provided to the Po’Ka Project from 2005 to 2011.

The six administers were initially charged on Aug. 8, 2013, with fraud, theft, embezzlement, tax evasion and money laundering.

According to U.S. Attorney for Montana Michael Cotter, the indictments came at the end of a two-year investigation by the Guardians Project, a cooperative effort created in 2011 between the Department of the Interior, the Federal Bureau of Investigation and the Internal Revenue Service.

The Blackfeet Po’Ka Project received about $9.3 million in federal grant money from the Substance Abuse and Mental Health Services Administration from 2005 through 2011.

The SAMHSA grant required that the Blackfeet Tribe work to make the Po’Ka Project self-sufficient by the end of the grant period.

To achieve that goal, the Tribe was required to provide matching contributions — either cash or in-kind — with the idea that as federal participation declined, tribal participation would rise to fill the funding void left by the absence of federal funds.

Evidence showed that the in-kind commitment could never be honestly met, so the conspirators allegedly inflated figures related to in-kind contributions, assigned values to nonexistent and illegitimate “contributions,” and created fraudulent invoices and records to support fictional or inflated contributions.

The other five administers and their sentences included:

• Francis Kay Onstad, 61, of Valier, the Po’Ka Project’s former director, was sentenced to 38 months in prison and $1 million in restitution.

• Delyle Shanny Augare, 58, of Browning, the Po’Ka Project’s former assistant director, was sentenced to 44 months in prison and $1 million in restitution.

• Katheryn Elizabeth Sherman, 67, of Browning, a former Po’Ka Project staff worker who handled in-kind invoicing, was sentenced to 12 months in prison and $250,000 in restitution.

• Dorothy May Still Smoking, 64, of Browning, the Po’Ka Project’s former local evaluator, was sentenced to 30 months probation and $100,000 in restitution.

• Charlotte B. New Breast, 53, of Browning, a former administrative assistant for the Po’Ka Project, was sentenced by Judge Morris on Jan. 16 to three years probation and $50,000 in restitution.

• A seventh individual with ties to the Po’Ka Project was sentenced by Judge Morris on May 23. Shawn Augare was sentenced to nine months in prison and $6,460 in restitution after he pleaded guilty to bank fraud on Feb. 11.

According to Cotter, Augare cashed and deposited forged checks from The Child and Family Advocacy Center bank account, which was controlled by his father, Delyle Shanny Augare, and Francis Onstad, both directors of the Po’Ka Project. Augare allegedly admitted to FBI agents that he stole $10,300 during the commission of the bank fraud.