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Subject: Name of Shasta Nation is used for a casino scam at the opposite end of the State of California.
The Pioneer Press, at the very top of the State of California, grants permission for this article to be copied and forwarded. Pioneer Press, Fort Jones, California April 6, 2005 Vol. 32, No. 24 Page 1, column 1
Shasta name used illegally
-- Los Angeles man used name of tribe.--By Liz Bowen, assistant editor, Pioneer Press, Fort Jones, California
SACRAMENTO -- Leaders of the Shasta Nation asked the State of California to intervene, when they learned of a casino scam in Los Angeles that was using their name.
As a result, state securities regulators ordered Tom Kelly to stop selling shares in a non-valid Indian Gaming casino in March.
According to a letter sent to potential investors, Kelly said the Shasta Nation was planning on building a casino on a terraced mountaintop near Magic Mountain in north Los Angeles County.
"He saw an opportunity to raise money for himself using our name," said Shasta Nation Chairman Roy Hall Jr. "We will not tolerate that."
It was the California State Department of Corporations that issued the formal "desist and refrain order." It was issued on March 25, 2005. Allegations pointed to Tom Kelly who was referred to as "Managing Director of the First California Diversified Fund, LLC."
Tom Kelly proposed to raise $7.5 million
The state order said that Kelly had violated a number of Corporations Code sections. These included telephone and mail-sent solicitations claiming to offer $25,000 per share in a proposed casino by the Shasta Nation. Potential investors that received the solicitations indicated that the purpose of the offering was to raise $7.5 million and to sell up to 300 shares. At press time, it is not known how many shares were sold by Kelly, before he was shut down by the state.
In response to the scam, the Shasta Nation issued a statement that it is "disgusted by the blatant attempts to take advantage of our name and reputation by unscrupulous people. We have acted swiftly and without hesitation, as we will continue to do."
Chairman Hall and other council members were shocked when they realized Kelly was conducting a scam using their name over 700 miles to the south at the other end of the state.
The Shasta’s are well aware of the laws governing Indian Gaming through the U.S. 1988 Congressional Act.
Off-reservation gaming is being tried by various tribes that are usually backed by big-time Las Vegas-style gaming management companies. The Shastas are fighting off-reservation shopping by other tribes and are keeping track of the players pushing the gaming and Indian gambling industry.
During the past year, the council has communicated often with the National Indian Gaming Commission, which governs Indian casino applications. The tribe has been contending against the encroachment of three other tribes on its aboriginal territory, which encompasses most of Siskiyou County and across the border into Oregon.
Treaty R states the Shasta Nation’s boundaries
One of the governing laws regarding placement of Indian casinos is that the casino must be placed within the boundaries of the tribe’s aboriginal territory.
Treaties made by the U.S. government and tribes created the boundaries. For the Shasta Nation and other tribes in California, those treaties were signed by tribal chiefs and headmen; and the government agents.
In Gibb’s journal, Treaty R was signed by Shasta chiefs and headmen on Nov. 4, 1851 by Redick McKee at the "camp at Scott’s Valley." Gibb traveled with McKee, who was one of the three commissioners sent by the President of the United States to sign the treaties in California. It was Gibb’s duty to record the wording, dates and signing of the treaties. Gibb’s journal can be found in the Library of Congress and other federal and state departments.
"We were being used by Kelly," said Chairman Hall, who was pleased with the way the state securities department handled the scam.
The Shasta Nation is seeking legal financial backing
Thomas J. Hice, the financial advisor and consultant to the Shasta Nation, placed an advertisement in the Wall Street Journal on Oct. 31, 2004 to raise funds to purchase real estate for the Shasta Nation. According to Hice, Kelly was one of many calls that inquired about the Shasta’s Wall Street Journal ad and a letter of information was sent by the council to Kelly. Portions of this letter were used by Kelly in his solicitations.
The Shasta Nation, with approximately 1,500 members, has created a socio-economic plan and is indeed looking for financial partnerships. But Hice concluded along with the Shasta Council that Kelly’s scam was a "deliberate attempt to deprive investors of funds for the benefit of Tom Kelly and his associates."
Also the Shasta Nation would not be able to even apply for a casino under present conditions -- for the Shasta Nation has not yet received federal recognition. It does have a non-profit incorporation through the State of California. Yet, the U.S. government still acknowledges the boundary lines of the tribe through the treaties. Under the Bureau of Indian Affairs rules, tribes cannot reshape their boundaries, though many are trying in order to find better sites for Indian Gaming casinos.
The Shasta’s submitted their application for federal recognition in 1983 and have met with brick walls in receiving the recognition.
Currently, U.S. Congressman Wally Herger, of California District 2, has submitted extensive documentation for the Shasta Nation to the Bureau of Indian Affairs to aid federal recognition.
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