Charlotte B. New Breast, First of the Po’Ka Defendants, Given Probation

The United States Attorney’s Office announced that during a federal court session in Great Falls on January 16, 2014, before U.S. District Judge Brian M. Morris, Charlotte B. New Breast, 53, of Browning, was sentenced to a term of three years’ probation, $50,000 in restitution, and a special assessment of $100.

New Breast was sentenced in connection with her October 21, 2013 guilty plea to theft from an Indian Tribal government receiving federal grant funds. New Breast was one of six defendants charged in the multi-million-dollar scheme to embezzle federal grant funds from a program for troubled youth on the Blackfeet Reservation known as the Po’Ka Project.

In an Offer of Proof filed by Assistant U.S. Attorney Carl Rostad, the government stated it would have proven that the Blackfeet Po’Ka Project was developed to help troubled Native American youth. Po’ka received its funding from the Substance Abuse and Mental Health Services Administration (SAMHSA) of the Department of Health and Human Services. Beginning in 2005 with a $1,000,000 federal disbursement, the grant ultimately became a $9.3 million program over a six-year period (2005-2011). The funding arc started with the $1,000,000 award, rose to $2,000,000 per year for two years (2007 and 2008), and then tapered off to $1,000,000 in 2010 and $300,000 in 2011.

According to the SAMHSA grant synopsis, the Po’Ka Project—also known as Blackfeet Children System of Care—was a reservation-wide children’s mental health system. The project goals were to (1) to implement the systems of care philosophy at the local tribal level; and (2) to identify, plan for, or enhance coordination and facilitate a wraparound process enabling children with SED (severe emotional disorders) and their families to access services to meet their needs.

Francis Onstad was the director of Po’Ka and Delyle Shanny Augare was the assistant director. Charlotte New Breast was the administrative assistant.

In In-Kind Contribution Requirement

It was the stated intent and proposition from the tribe that the Po’Ka Project would ultimately become self-sufficient, a completely tribal program entirely supported by the tribe, by the end of the grant period. The grant required that the tribe provide a certain amount of funding. A requirement contained in certain legislation, regulations, or administrative policies that a recipient must maintain a specified level of financial effort in the health area for which federal funds will be provided in order to receive federal grant funds. To achieve the goal of final self-sufficiency, the tribe was required to provide in-kind matching contributions to continue to secure federal payments with the idea that as federal participation declined, tribal participation would rise to fill the funding void left by the absence of federal funds. It was the intent of the parties and SAMHSA that the Po’Ka Project would survive on its own once federal funding was no longer forthcoming.

An in-kind contribution is a non-cash contribution provided by non-federal third parties in support of the project funded by the grant and its objectives. Third party in-kind contributions may be in the form of real property, equipment, supplies, other expendable property, and the value of goods and services directly benefitting and specifically identifiable to the project or program.

As noted, a key component of the grant award was the funding arc; the ratio of federal money to in-kind contributions. Only if Po’Ka met the in-kind contribution targets could they receive the maximum amount of federal money from the grant. Consistent with the sustainability objective of the grant, the tribe’s in-kind contribution requirement was the highest in the later years of the grant. The Blackfeet Tribe was required to provide $7 million of in-kind contributions from fiscal years 2009 through 2011. That created an environment where the appearance of substantial in-kind contributions became paramount. However, the in-kind commitment could never be honestly met, so the conspirators (Onstad, Augare, and others) began making up facts and documents to try and satisfy auditors that the in-kind contributions represented on their reports to SAMSHA were legitimate. They did so by inflating the figures related to in-kind contributions, assigning values to non-existent and illegitimate contributions, and manufacturing fraudulent invoices and records to support fictional or inflated contributions. The misrepresentations as to in-kind amounts were made in monthly reports to SAMSHA, and the documents were generated to placate auditors conducting a required annual audit of the tribe’s operations.

Several people whose names were used as in-kind contributors denied preparing or signing the invoice and denied contributing time or goods to the Po’Ka project, at least in the amount claimed. Invoices were presented to auditors that purported to represent the provision and creation of Blackfeet Story Telling CDs and other in-kind contributions of service by Floyd Heavy Runner in July 2010 and August 2010, even though Heavy Runner had suffered a massive and debilitating stroke in May 2010 and was incapable of providing services of any kind to the Po’Ka Project in July and August of that year. In another important e-mail exchange, on March 21, 2011, in-kind coordinator and co-defendant Elizabeth Sherman requested that a social worker from Shelby sign eight invoices reflecting thousands of dollars in in-kind contributions. That witness replied, “I cannot do it because I did not do the work. I value my name and professional integrety [sic] and will not sign a document stipulating work I did not do, donated or otherwise.” One person was credited for an in-kind contribution of over $350,000. She denied doing that amount of work, producing all the binders identified on the invoice, denied preparing the invoice, and denied signing the invoice. She said the figure appeared to come from a conversation that she had with Francis Onstad a year earlier when Onstad asked what it would cost the tribe to train every tribal employee in health care regulations.

The Blackfeet Tribe claimed $440,000 in in-kind contributions related to professional services provided by a certified public accountant (CPA) who gave audit assistance to the Po’Ka Project. When interviewed, the CPA determined that he (1) charged the Blackfeet Tribe for the time he spent providing audit assistance and (2) was unaware that the tribe claimed his costs as in kind contributions.

Po’Ka also claimed $92,000 in in-kind contributions for planning services which, according to the tribe, were provided by the staff of one of Montana’s United States Senators. The chief of staff indicated that no one in the senator’s offices in D.C. or Montana had even heard of the Po’Ka project.

During the period of the grant, Onstad and Augare did a significant amount of traveling paid for with Po’Ka funds, ostensibly to conferences and related events. Onstad and Augare had New Breast download hotel receipts and portions of hotel receipts so that receipts in higher amounts could be created and used to obtain greater reimbursement for travel than that amount actually expended. This happened regularly and cut-and-paste receipts were found attached to a New Breast e-mail. The name on the receipt was Francis Onstad.

In a sentencing memorandum, Rostad told the court that New Breast was the least culpable defendant and received nothing from the scheme other than a few miscellaneous benefits and continued employment. Rostad advised the court that New Breast had cooperated with the investigation and agreed to provide significant information that would assist in the prosecution of others involved with Po’Ka which entitled her to a motion from the government that made a probationary sentence under the advisory sentencing guidelines a possibility. The prosecutor said that but for her assistance and her minimal role the United States would have sought jail time. But for those factors, New Breast should “should have taken her rightful place in line for the consequences of accountability, a line that would have included incarceration under the guidelines."

This case was brought by the Federal Bureau of Investigation with the assistance of Department of Health and Human Services Office of Inspector General and the Internal Revenue Service-Criminal Investigation Division as part of the Guardians Project.