Rumsey Band of Wintun Indians sues former advisers
10 October 2007
WOODLAND, California — (PRESS RELEASE) — The Rumsey Band of Wintun Indians today sued its former long-time general counsel, a former financial adviser, and others for unjustly enriching themselves with Tribal assets through fraud, civil conspiracy, negligent misrepresentation, breach of contract, breach of fiduciary duty, and several other causes of action.
The lawsuit names as defendants Sacramento attorneys Howard Dickstein and his partner, Jane Zerbi; their law firms; Arlen Opper, a former Tribal investment adviser; as well as other parties.
Filed in Yolo County Superior Court, the suit seeks both punitive and compensatory damages, as well as restitution for millions of dollars in Tribal assets “wrongfully obtained or held” by the defendants.
“This lawsuit is about greed and betrayal,” are the opening words of the complaint. It goes on to state that the defendants “took actions, and engaged in a course of dealing, that involved breaches of trust and violations of duties of the most basic and, indeed, sacred kind.”
The Tribe’s suit notes that that even as Dickstein and Opper held themselves out as Rumsey’s most trusted advisers, they repeatedly “placed their own interests, or the interests of others, ahead of the Tribe’s.”
The filing states that despite their positions of trust and confidence, and their duties of undivided loyalty and fidelity owed to the Tribe, they took actions designed “to enrich themselves, or others, at the Tribe’s expense.”
Shortly after their 2006 election, the new Tribal Council, including Tribal Chairman Marshall McKay, hired an outside investigative firm to conduct a forensic accounting investigation of the Tribe’s business affairs.
The Council terminated Dickstein and Opper when the investigation uncovered questionable actions that were widespread and disturbing.
“We knew something was very wrong and that they were taking advantage of us,” said McKay. “We were determined to take control of our business to protect our sovereignty and the future of our Tribe. Now we will let the legal process take its course.”
The suit states that:
– Dickstein and Opper involved the Tribe in investments and transactions in which the business terms were more favorable to others than to the Tribe. Many of these deals “were fraught with self dealing and conflicts of interest they failed to disclose.”
– Opper cut himself into various deals without any disclosure to the Tribal Council. The suit also states that Opper collected management fees for purportedly managing Tribal assets, without actually managing certain of them.
– Dickstein used or allowed others to use Tribal assets for personal purposes without reimbursement or proper approval. This included use of airplanes for which the Tribe had purchased rights of use and a Sacramento loft.
– Dickstein and Opper resisted informing the Tribal Council of the full extent of their compensation, even when specifically asked.
– Dickstein failed to render a proper accounting of a $9 million attorney-client trust account funded by the Tribe and maintained by Dickstein’s firm for payment of client expenses.
“In the final analysis, the Tribe’s former trusted counsel and investment adviser literally fed off the Tribe’s financial success, or allowed others to do so, without the Tribal Council’s knowledge and approval,” the suit states.
The complaint underscores the egregious nature of the defendants’ misdeeds by recounting the “meteoric” economic success story of the Rumsey Band, a small Indian tribe that not long ago “lived in relative poverty in substandard housing on a remote parcel of reservation land with little hope for advancement or economic development.”
The advent of Indian gaming virtually overnight thrust the Tribe and its members into the complexities of big business and finance, charged with operating a casino that not only generates revenue for the Tribe, but that also is widely considered an “economic engine” for all of Yolo County.
“If ever members of this historically impoverished Tribe needed the guidance of their trusted advisors in matters of law and finance, it was then,” the complaint states. “That, however, was not what they received.”