By Denny Walsh and Sam Stanton
Federal agents are moving to seize 32 properties stretching from Sacramento to Hawaii to San Diego in an alleged kickback and money laundering scheme that they say drained $18 million from the coffers of the tribe that runs the Thunder Valley Casino in Lincoln.
Documents filed by the Internal Revenue Service in U.S. District Court in Sacramento late Tuesday allege that Sacramento developer Bart Volen and two others systematically siphoned off millions from the United Auburn Indian Community while they oversaw the construction of office buildings that now serve as the tribe's headquarters.
The IRS is seeking to seize the properties -- including condominiums in Hawaii, San Diego and South Lake Tahoe -- that the agency says were purchased with money taken from the tribe in an overbilling scheme.
No criminal charges have been filed in the case, which targets Volen, tribal administrator Greg Baker and former tribal worker Darrell Hinz.
None of the three men could immediately be reached today.
Baker has been placed on paid leave from his post as tribal administrator and a spokesman for the Indian community noted that no charges have been filed.
"We note that no criminal action has been filed at this time," spokesman Doug Elmets said. "No wrongdoing has been proven.
"If the United Auburn Indian Community has been the victim of fraud, we expect any assets seized to be used as full restitution."
In a 189-page affidavit filed by IRS special agent Daniel M. Norman, the alleged scheme is described as taking place between October 2006 and January 2008, when the three men were involved in the construction of the tribe's Indian Hills Office Project, known as IHOP.
According to Norman's investigation, Volen was the construction manager and routinely inflated invoices from the general contractor on the project, then submitted the phony bills to the tribe for payment.
One example involved a bill for asphalt that the general contractor submitted to Volen for $40,027.12. Volen, in turn, submitted essentially the same bill to the tribe for payment, but changed the amount to $1,906,828.48, the affidavit states.
Other invoices were changed simply by adding a "2" or a "3" to the thousands column on a bill, changing a $370 charge to $2,370, the affidavit states.
The IRS contends that more than $18 million in overbillings was siphoned off and used to purchase vacation homes, luxury automobiles and commercial properties that the government is now seeking to seize.