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Investigation uncovers scheme to skim gaming revenue from Oklahoma tribes

Brian Foster

Brian Foster

CLINTON — One of the Cheyenne and Arapaho Tribes' casinos paid more than $1.2 million over 18 months to lease a two-acre parking lot — about 10 times the fair market value of the land, an investigation into misuse of gaming revenue has found.

The lot was owned by a company with ties to the tribes' former director of gaming.

It was discovered that rogue employees had agreed to pay a portion of the gross gaming revenues from the Lucky Star Casino in Clinton as part of the lucrative lease.

The Cheyenne and Arapaho Tribes have agreed to pay a $100,000 fine to the National Indian Gaming Commission if the terms of the settlement are not carried out. The terms of the settlement include providing more training for the tribes' gaming employees.

The NIGC investigation found that Brian Foster, the tribes' former director of gaming, participated in a scheme to skim gaming revenues and collect exorbitant lease payments from the tribal casino.

Foster was until recently chairman of the Oklahoma Indian Gaming Association but his name and photograph have been removed from the OIGA website.

Sheila Morago, executive director for OIGA, confirmed Foster is no longer with the organization. OIGA, a trade group for Indian gaming in Oklahoma, did not respond to additional questions.

Foster negotiated a deal in 2012 to lease the parking lot adjacent to the tribes' Lucky Star Casino in Clinton for $25,000 per month plus 1 percent of the gross gaming revenue from the casino, according to the settlement agreement. In total, the tribes paid more than $50,000 a month to lease the small parcel of land.

In an email, Foster allegedly laid out the scheme to purchase the parking lot, as well as long-term plans for the land that would "keep the (National Indian Gaming Commission) out of the picture I think even though it is a non gaming contract but payments would be made from the gaming facility," according to an email quoted in the tribes' settlement agreement.

A company called Clinton Land Holdings LLC, managed by Thomas Fox, purchased the parking lot in 2012, but Foster provided a $150,000 down payment on the land drawn from his personal bank account, records show.

Fox was once president of Southwest Casino Corp., a Minnesota-based company the Cheyenne and Arapaho once contracted with to manage its casinos. Foster also was once a vice president for Southwest Casino Corp., according to regulatory filings.

Until recently, Fox worked for the Red Rock-based Otoe-Missouria tribes' gaming operations, but Otoe-Missouria staff said Friday that Fox is no longer employed with the tribe.

Attempts to contact Foster or Fox were unsuccessful.

In a statement, Cheyenne and Arapaho Gov. Eddie Hamilton said the tribes are still actively investigating and pursuing legal action "against those who have wronged the tribes in the past."

The tribes terminated Foster's employment once it discovered the lucrative contract, Hamilton said.

"As we move forward, we will look to hold those people accountable who have squandered away our tribal resources for their own personal gain," Hamilton said. "My administration is dedicated to continuing these efforts. In doing so, we hope to strengthen our tribes and provide a better future for our tribal members."

The lucrative parking lot contract was in "clear violation" of federal Indian gaming laws meant to protect gaming as a means of generating revenue for Indian tribes, Jonodev O. Chaudhuri, National Indian Gaming Commission chairman, said in a statement.

The Cheyenne and Arapaho Tribes cooperated with the National Indian Gaming Commission's investigation after discovering irregularities with the parking lot contract, he said. "They have provided full cooperation to the NIGC throughout the investigation of this matter."

Brianna Bailey

Brianna Bailey joined The Oklahoman in January 2013 as a business writer. During her time at The Oklahoman, she has walked across Oklahoma City twice, once north-to-south down Western Avenue, and once east-to-west, tracing the old U.S. Route 66.... Read more ›

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