Wakpamni Lake Corp. Seeks Relief from Default Judgment in TED Bonds Fraud Case

Here is the pleading from Michelin Retirement Plan v. Dilworth Paxon LLP (D.S.C.):

608 WLCC Rule 60 Motion

608-1 Lone Hill Declaration

608-15 Victim Impact Statement

608-16 Raynes Declaration

An excerpt from the motion:

In or about the fall of 2017, a man named Quattlebaum contacted WLCC and Wakpamni Lake Community President Lone Hill on three separate occasions. (Lone Hill Decl. ¶ 27; see also Raynes Decl. ¶ 16.) President Lone Hill understood that Mr. Quattlebaum was Judge Quattlebaum, then a United States District Judge for this Court.1 (Lone Hill Decl. ¶ 27; see also Raynes Decl. ¶ 16.) Mr. Quattlebaum asked President Lone Hill about the financial state of WLCC and Wakpamni Lake Community and about the subject matter of the lawsuit. (Lone Hill Decl. ¶ 27.) Based on the information received, Mr. Quattlebaum deduced that WLCC and the Wakpamni Lake Community were destitute. (Id.) President Lone Hill understood from her conversations with Mr. Quattlebaum that he understood and appreciated their innocent and impoverished position. President Lone Hill further understood and believed that Mr. Quattlebaum—as a judge of this Court—indicated to her that no further action was needed with respect to this case.

Prior post in this case here.

Materials in Yet Another Pending Suit Filed in 2017 regarding Galanis et al. Investment Fraud involving Wakpamni Lake Community Corporation

Here are the materials so far in Water Works Board of the City of Birmingham v. U.S. Bank National Association (D.S.D.):

1 Complaint

26 US Bank MTD

29 Opposition

30 Reply

32 DCT Order

68 Chicago Transit Complaint in Intervention

UPDATE:

99 US Bank Motion to Dismiss

151 Stipulation of Dismissal [RHCT]

Materials in Pending Suit Filed in 2017 regarding Galanis et al. Investment Fraud involving Wakpamni Lake Community Corporation

Here are the materials (so far) in Michelin Retirement Plan v. Dilworth Paxon LLP (D.S.C.):

1 complaint

67-1 Greenberg Traurig MTD

91-1 Dilworth Paxon MTD

150 Michelin Response to GT MTD

150-10 GT Opinion Letter

150-12 GT Invoice to WLCC

150-14 OST Resolution on Raines Authority

150-15 OST Council Meeting Minutes

150-16 Morton Materials re WLCC

150-17 GT Opinion Letter

161 Michelin Response to Dilworth MTD

161-2 Dilworth Opinion Letter

161-4 Investment Mgmt Agreement

161-5 Trust Indenture

161-10 SEC Complaint

161-14 Dilworth Opinion Letter

172 Request for Default Judgment on Wakpamni

179 GT Reply

180 Dilworth Reply

203 Magistrate Report

209 GT Objection

218 DCT Order Denial of 67 & 91

372 Notice of Voluntary Dismissal of GT

408 Magistrate R&R re 301

411 Amended Complaint

411-1 Timothy Anderson Engagement Letter

411-10 WLCC Bank Statement

468 DCt Order Granting Dilworth MTD

Jury selection is set for February 2020. Wakpamni Lake Community Corporation did not file a response. The clerk issued a default judgment against WLCC. Docket no. 173.

605 Default Judgment

More Docs Related to Galanis et al. Fraud involving Wakpamni Lake Community Corporation owned by Oglala Sioux Tribal District

We posted a complaint yesterday filed by a Chicago retired employee fund against individuals and law firms that worked on this deal.

Here are a few more docs (there is a lot to dig up, but this is a start):

SEC complaint

federal-brief-in-us-v-archer.pdf [details the scheme, appeal in related conviction]

366_f.supp_.3d_477.pdf [galanis decision, on appeal]

Chicago Employee Retirement Fund Sues “Fly-By-Night Tribal Financiers” + Law Firms over “Issuance of $43 million in Worthless Bonds” [case involves Oglala Sioux Tribal Subdivision] — Updated with Federal Court Materials

Update — the case has been removed to federal court, the Northern District of Illinois:

1 Notice of Removal

1-1 Complaint Exhibits

Additional update (3/17/2020):

18 Greenberg Traurig Motion to Dismiss

23 Dilsworth MTD

32 Plaintiff Opposition to Dilsworth MTD

33 Plaintiff Opposition to GT MTD

Here is the complaint in Chicago Transit Authority Retiree Health Care Trust v. Dilworth Paxon LLP (Cook County Circuit Ct.):

Complaint

An excerpt:

1. This lawsuit arises from the Defendants’ participation in, and assistance with, the issuance of $43 million in worthless bonds (the “Bonds”) to unwitting public pension funds, including RHCT. The Bonds were not part of a legitimate public finance project, but rather a criminal scheme to enrich several individuals connected to the Defendants, including well-known fraudster, John Galanis, his son, Jason Galanis (collectively, the “Galanises”), and fly-by-night tribal financiers, Steven Haynes and Raycen Raines, the latter of whom was romantically involved with the Greenberg partner representing the issuer during the transaction.
2. The fraud, which was concealed from the bondholders until May of 2016, involved the use of bond proceeds to purchase an annuity contract with a fictious offshore entity, which is unheard of in legitimate municipal finance transactions. Only a fraction of the bond proceeds were paid to the issuer, while the majority of funds were instead wired to the offshore annuity. Not surprisingly, the annuity company turned out to be fake, allowing the Galanises and their friends to steal almost $40 million in retirement funds from a variety of public pension funds, including those serving public school teachers, sanitary workers, and in RHCT’s case, retired CTA employees and their dependents.
3. The Bonds have been the subject of criminal, SEC and civil litigation in various jurisdictions throughout the country. In its wake, several individuals have pleaded or been found guilty of criminal charges, and multiple investment companies have been forced out of business.
4. None of this would have occurred without the Defendants’ assistance. As more fully alleged herein, the Defendants–national law firms with supposedly sophisticated municipal finance practices–both served as bond counsel in the transaction, assisting not only their “clients,” but several other parties in carrying out what reasonably prudent lawyers would have recognized to be an obvious financial crime.
5. In addition to preparing transaction documents and supervising the bond issuance. the Defendants authored misleading opinion letters containing statements inconsistent with facts of which they were aware, and which failed to disclose material facts that would have prevented the transaction from closing. Through their opinion letters, the Defendants gave the transaction the appearance of legitimacy necessary for the Bonds to issue. Defendants received hundreds of thousands of dollars in stolen retirement funds as payment for their assistance with the issuance.
6. Through their conduct, and in disregard of the duties they owed foreseeable victims like the bondholders, the Defendants directly and proximately caused RHCT in excess of $6,000,000 in losses, which RHCT seeks to recover in this case.
Another excerpt detailing what appears to be efforts by the tribe to stop the alleged scheme:
64. However, instead, on June 24, 2014, the OST’s Tribal Council passed a resolution stripping Raines of authority to act with respect to tribal economic development matters, including “Tribal Economic Development (TED) Bonds,” but also “any other economic development projects.” (Exhibit C, June 24, 2014 OST Resolution.) The resolution specifically noted that Raines had exerted undue influence over OST’s then-president to gain support for economic development projects.
65. Raines served as WLCC’s primary business representative and contact for the Wakpamni bond transaction. However, the tribal resolution stripping Raines of authority over tribal economic development matters was never disclosed to the bondholders or the Indenture trustee, U.S. Bank, by Greenberg or Dilworth during the transaction.