Monday, July 02, 2007

Blackfeet Tribe Member Pleads Guilty to Larceny of Grant Funds

Rex Emil Wetzel, 31, Cutbank, Montana, pled guilty to larcency of grant funds issued for a down payment on a home.

The General Assistance Program (GAP) is a federally funded aid program through the Department of Housing and Urban Development (HUD), Office of Native American Programs, to promote Indian ownership of real property by providing the funds necessary for the down payment.  Tribal housing authorities apply to HUD for GAP grant funds.  A qualified buyer makes application through the local housing authority.  If the application is approved by the housing authority, a check for the amount of the down-payment is issued and made payable to both the buyer and the seller.  The grant funds can only be used for a single purpose – for an Indian person to make a down-payment on a personal residence he or she will own and occupy.

On January 10, 2002, Wetzel made application to the Blackfeet Housing Authority (BHA) on the Blackfeet Indian Reservation for a GAP Financing Grant.  Wetzel is an enrolled member of the Blackfeet Tribe.  On March 18, 2002, the BHA approved Wetzel‘s GAP Financing Grant application.

On July 17, 2003, the BHA issued a GAP Financing Grant check, number 018730, in the amount of $12,000, made payable to P.M. and N.M. (the sellers) and Wetzel (the buyer).  The check was delivered to the original grant applicant, Wetzel.

The check was cashed at First State Bank, Shelby, Montana, on July 21, 2003.  It carried the endorsements of P.M. and N.M.  The bank president told investigators that Wetzel had previously had an account at First State Bank but that it had been closed. 

On or around July 21, 2003, Wetzel went to First State Bank, reopened his account, and deposited the subject $12,000 check.  First State Bank assumed that all three endorsements on the backside of the check were legitimate.  Wetzel requested to withdraw all $12,000, but First State Bank placed a three-day hold on the check.  Wetzel withdrew $100 in cash.  The check cleared through Native American Bank, Browning, Montana, and Wetzel subsequently withdrew all of the funds by means of numerous written checks.

N.M., after hearing that her husband had endorsed the check, became suspicious when Wetzel did not return with the check for her signature.  She suspected that Wetzel had forged her name and converted the check to purposes for which the check was not intended.  She notified the BHA of her suspicions and confirmed that if the check was negotiated with her endorsement the signature would be a forgery.

The BHA determined that the check had been negotiated but by that time the funds had been completely depleted by Wetzel through a series of transactions over a two-week period.

Wetzel faces possible penalties of 5 years in prison, a $250,000 fine and 3 years supervised release.

mortgage fraud