McCoy alleges political motivation in marriage fraud prosecution

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McCoy alleges political motivation in marriage fraud prosecution

FBI agents raided Cherokee’s Qualla Housing Authority in February 2017. Holly Kays photo

While the federal marriage fraud case that’s been the topic of much discussion on the Qualla Boundary over the past year is winding down, FBI activity in Cherokee is likely to continue.

That’s according to statements that Assistant U.S. Attorney Daniel Bradley made during the Aug. 23 sentencing hearing for Ruth Marie Sequoyah McCoy, who pled guilty to one count of conspiracy to commit marriage fraud and was sentenced to two years on probation.

“This prosecution of a marriage fraud conspiracy was a spinoff of a different investigation, something that in some ways is a larger investigation or investigation of — in terms of sentencing exposure for more serious crimes,” Bradley said Aug. 23, according to a court transcript. “And it is also true that our office, as well as the FBI, were particularly interested in information that Ms. McCoy, we suspected, might have about that larger investigation.”

U.S. District Judge Martin Reidinger approved a less severe sentence partially due to McCoy’s cooperation with investigators, according to the transcript.

“I have also allowed for the probationary sentence in light of the history and the characteristics of the defendant. The defendant has been an official on the reservation with the Bureau of Indian Affairs for an extended period of time,” Reidinger said at the hearing. “She has, as far as the Court can tell, discharged her duties in a very positive manner there. As a result of this crime, and this conviction, she has not only lost that position but has lost that career opportunity, and that is a considerable loss that the defendant has already suffered.”

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Political motivation alleged

According to McCoy’s attorney Sean Devereux, the main reason she suffered any punishment at all is because of an adversarial relationship with former Principal Chief Patrick Lambert.

“Ruth McCoy was prosecuted not because of the inherent malignancy of her offense but because a political adversary (Lambert) had the ear of an FBI agent,” reads a pre-sentencing memo Devereux filed Aug. 17. “Her home; her office and her son’s home were all combed over by federal and tribal agents. Her family members and associates were threatened and cajoled. In the end, despite this intense scrutiny and several years of loud political rhetoric, Ruth McCoy was prosecuted for the only offense that the FBI was able to find.”

According to Devereux, Lambert and FBI Special Agent Andrew Romagnuolo had a longstanding relationship that went back to the years Lambert spent as executive director of the Tribal Gaming Commission. Devereux said that the FBI maintained an office in the same building that housed the TGC.

However, according to FBI spokesperson Shelley Lynch, the FBI never had an office at that address. Lambert concurred, saying that agents might show up at the casino to investigate a particular crime but never had any permanent office space there. Lambert said he has never met or spoken with Romagnuolo and has seen him only once, at a distance of roughly 50 yards away.

In comments emailed to The Smoky Mountain News, Lambert called Devereux’s version of events “defamatory lies” that border on “ethical concerns,” postulating that McCoy may have committed perjury by “presenting her lies in writing to a Federal Judge.”

“She is spreading lies and making defamatory statements about me and also about a U.S. Federal Agent,” Lambert said. “She boldly proclaims in her filings before the Federal Judge that a certain FBI agent and I have a friendship and a long-standing working relationship and I somehow have the power to direct his actions. This is simply a lie and nothing is further from the truth.”

The FBI began its investigation in Cherokee after Lambert, when still in office, completed forensic audits into various aspects of tribal government. Lambert presented a sampling of the results to Tribal Council in April 2016, stating that they showed “clear fraud, wrongdoing, crimes and a failed system of checks and balances within this tribal government,” and that he had turned the audits over to the FBI.

Over the next year, politics in Cherokee turned topsy-turvy as nine of the 12 councilmembers brought impeachment proceedings against Lambert, accusing him of a laundry list of offenses, including failing to secure proper approval for contracts, issuing payments for legal work done prior to his swearing-in and illegally entering his hotel into a contract with the tribe after his election as chief.

Lambert was eventually removed from office in May 2017, with Tribal Council finding him guilty on eight out of 12 charges. The proceedings were highly controversial in Cherokee, with Lambert’s supporters maintaining even after the impeachment that the charges were trumped-up and the process used to prosecute them invalid.

At the same time Lambert’s administration was facing impeachment, the FBI was building its case. In February 2017, agents descended on the Qualla Housing Authority headquarters, confiscating two U-Haul loads of records. Arrests in the marriage fraud case came on June 21, 2017, just under a month after Lambert’s impeachment.

Devereux took special note of the timeline in his pre-sentencing memo filed Aug. 17, alleging that McCoy’s prosecution was more the result of Lambert’s desire for political retribution than of any substantial wrongdoing. He traced the basis for that allegation back to 2012, when McCoy, a supporter of former Principal Chief Michell Hicks, was appointed to the BIA post by a committee that included Hicks, according to Devereux’s memo. Lambert ran against Hicks in the 2003, 2007 and 2011 chief’s elections, losing each time. According to Devereux, McCoy was chosen for the deputy superintendent’s position over a Lambert supporter.

Within 24 hours of taking office in 2015, Lambert made some controversial personnel changes that his opponents said were political retribution to those affected and earlier this year resulted in a settlement of $100,000 for each of seven former employees who sued. In Devereux’s view, the FBI case was a way for Lambert to get to McCoy, who was not a tribal employee and therefore not his to hire or fire.

Lambert vehemently denied any insinuation that he’d been pulling the strings on the FBI’s actions.

“This case was not, and is not, about me or tribal politics,” he said. “Instead it is about a convicted felon who was found guilty of defrauding the United States government and who ultimately told lies to the federal judge in an attempt to receive a lighter sentence.”

While he hasn’t filed anything yet, Lambert added that he’s considering filing defamation of character claims related to statements in Devereux’s memo.

“She’s portraying me to be a certain way, and that’s just totally false. That’s just flat wrong,” he said.

Discussion in court

Claims in the sentencing memo launched some discussion during the Aug. 23 sentencing hearing, when Reidinger observed that “a good deal of what you (Devereux) submitted in writing goes to the issue of your assertion, for lack of a better way to put it, that there has been a corrupt use of the prosecutorial apparatus of the federal government in this case.”

Devereux was quick to say that he wouldn’t characterize it as an assertion of “corrupt use” and that he was sorry if it appeared that way.

“It has been my experience, Your Honor, over the last 30 years of practicing on the reservation, that about every six or seven years someone will decide that they’re going to clean up the Cherokee Indian Reservation, and that effort will usually last about a year and then we’ll cycle on,” Devereux responded. “What happens when that occurs in my experience is that whoever’s in political power on the reservation at that time has the ear of the agents, not necessarily the U.S. attorney’s office.”

However, he said, he felt there was a disparity in the way McCoy’s crimes had been investigated and sentenced compared to other defendants or other unprosecuted instances of marriage fraud. The defense had presented the government with a list of other people on the Qualla Boundary who had entered into arranged marriages to enhance someone’s immigration status, Devereux said. He continued on to state that in contrast to the crime she pled guilty to, McCoy was in other ways a success story.

The sentencing memo went into great detail on McCoy’s difficult childhood, which included witnessing the murder of her mother, bouncing around between roughly 10 foster homes and enduring sexual assault. Nevertheless, the memo stated, as an adult McCoy was able to earn a diploma from Southwestern Community College, work herself up to the position of deputy superintendent at the Bureau of Indian Affairs Cherokee Agency, refrain from developing any drug or alcohol addiction and provide a home for six children whose parents currently can’t care for them.

“She really does symbolize lots of problems that the Court has seen over the years that you’ve been on the bench and that I’ve seen in the years I’ve been practicing on the reservation and, to an incredible degree, has overcome those hardships and obstacles,” Devereux said. “Perhaps in some ways she’s overcompensated.”

Bradley told Reidinger that politics played no part in the government’s decision to prosecute McCoy.

“This prosecution of Ms. McCoy was never motivated by politics, either on our part or on the part of the FBI,” Bradley said, according to the court transcript. “It was never motivated, you know, by a desire to seek retribution against Ms. McCoy for her political activities.”

Instead, he said, it was motivated by its relationship to the larger investigation that initially drew the FBI to investigate goings-on in Cherokee. The U.S. Attorney’s Office and the FBI were both interested in information McCoy might have about that larger investigation, Bradley said.

“When this marriage fraud offense — this marriage fraud conspiracy involving her came to our attention, it struck our office and the FBI as an opportunity to engage with her and to potentially leverage her to provide investigation information with respect to other things,” Bradley said. “I’m very candid with that. There’s nothing improper about that. That’s something that happens frequently in these federal investigations.”

Information about the marriage fraud conspiracy came from “a variety of sources, including other federal agencies in other jurisdictions,” Bradley said.

“In open court at sentencing the AUSA (Assistant U.S. Attorney) stated that her felonious crimes were discovered during the ongoing investigation into ‘Public Corruption’ within our tribe and certainly nothing about tribal politics,” Lambert said. “I firmly encourage the FBI and U.S. Attorney’s office to continue its ‘Public Corruption’ investigation into matters within our tribe.”

While sentences have been rendered for five out of the seven current defendants in the marriage fraud case, Ofir Marsiano and Golan Perez — both of whom have entered guilty pleas — are awaiting hearings scheduled for 9:45 a.m. and 10:30 a.m., respectively, on Sept. 27 to receive their sentences.

Devereux and McCoy did not return requests for comment on this story.

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