LCO Chairman and Casino Manager place millions of casino dollars into “Rent A Tribe” scheme

A little-known LCO tribal enterprise known as LCO Financial Services has been engaging in online payday loans charging interest rates, at times, in excess of 800%. The operation was incorporated on September 1, 2013, and not long after, began doing business as Blue Trust Loans.

According to documents retrieved, LCO Financial Services was established for two purposes, to engage in online lending and online gaming. The online lending became a partnership with an overseas company, Cane Bay Partners VI, who are using tribes to avoid state and federal regulations running dozens of high interest payday loan websites because tribes claim sovereign immunity.

The LCO Tribe, through LCO Casino, invested $1 million with Cane Bay in 2013 for a 2% share of all online lending businesses conducted through LCO Financial Services, according to multiple sources, including former tribal council members.

An additional $1 million dollars from the casino was invested into the Inter-Tribal Online Gaming Alliance (ITOGA) to establish an online bingo website that never launched. The investment was made over the summer of 2013.

The whereabouts of the million dollars is unknown as the LCO Financial Services company created underneath it, Moccasin Gaming, doesn’t exist and the one page website for ITOGA, sits idle with no contact us information or listing of member tribes. The contact us form no longer works.

LCO Financial Services issued a statement in defense of their online lending operation, but made no comment in reference to ITOGA or online gaming.

LCO Casino Chairman, Lee Harden, pushed for the creation of LCO Financial Services and was also named its Chairman of the Board and is named as manager of the company.

Harden was appointed Chairman of the Board at the first meeting under a brand new LCO Chairman, Mic Isham, on Monday, July 8, 2013. Isham was inaugurated as chairman on Friday, July 5, 2013.

Shortly after assuming office, Chairman Isham, with four votes from the tribal council, authorized Lee Harden to move forward with the “Rent A Tribe” scheme and the investment of $1 million into a non-existent online bingo company.

Summary of Details

LCO Financial Services is in partnership with Cane Bay Partners in a “Rent A Tribe” scheme and the practices used are in direct contradiction with LCO FS membership in Native American Financial Services Association (NAFSA), charging interest rates sometimes over 800% on loans, according to documentation and multiple sources interviewed. Chairman Isham is also Vice-Chairman of this organization.

There are dozens of documented complaints at several different reporting sites, including Ripoff Report and the Better Business Bureau, alleging that LCO’s payday loan website Blue Trust Loans is overcharging clients, harassing them using various 1-800-numbers that are also tied to other payday loan sites, operating in a similar fashion by other tribes in partnership with Cane Bay.

Cane Bay Partners are under several federal investigations but operate off shore to avoid usury laws and to avoid state and federal regulations. They are using multiple tribes generating millions of dollars, according to several national news articles.

We gave Cane Bay Partners $1 million for a 2% share.

Our tribe gave the Inter-Tribal Online Gaming Alliance (ITOGA) a $1 million investment to operate an online bingo site with a total of 6 tribes, but the site or sites never launched and the ITOGA website sits idle today and has no contact information, even the contact us submission form no longer works. The LCO Tribe’s own site Moccasin Gaming never got off the ground and we gave them $1 million. Where is that money and what happened to ITOGA.

LCO Financial Services has nine different company names underneath it and only two actually do business. Also, various LCO Financial Services board members have named themselves as managers of these different companies, and per their operating agreements, may pay these managers a wage. These so-called managers are also employed and collecting paychecks in other departments of the tribe.

LCO Financial Services and the many other company names held their board meetings in Lee Harden’s office during casino business hours, as documented in meeting minutes, and collected a $200 stipend each for every meeting they attended, according to a source close to the operation who wished to remain anonymous for fear of retaliation. This includes tribal attorney Jim Schlender and council member Norma Ross.

LCO Financial Services is the only tribal enterprise where all books and payroll are kept out of the hands of any tribal accounting department using an outside firm, Roe & Meyer.

A listing of this summary was sent to 16 persons involved, past or present, with LCO Financial Services in the day leading up to publication, and only one made a comment while the others shared no response to this article. Instead, a New York law firm, Rosette Law, sent a letter threatening a lawsuit if the article was printed.

LCO Financial Services also sent a statement in their defense, issued by a Robert Ford, but Ford didn’t indicate whether he is an employee of LCO Financial Services or the law firm.

The listing of this summary was sent to LCO Casino executives Lee Harden, Dulcie Rae Wolfe and Randy Cadotte, all who currently hold positions on the board of directors. It was also sent to all seven tribal council members and two current LCO FS board members, Di-Z Cross and William Trepania. Also, details were sent to the LCO Tribal Judge, Jim Schlender, who was the attorney who sat on the original board, and current attorney, Jason Kekek Stark. LCO Financial Services Executive Director, Trina Starr, was also sent a summary. Former board member, David Fleming, was also sent a copy but was out of town and unreachable.

The only person to respond was LCO Council Member Joel Valentin. Valentin said he was unaware of any of these details and only attended a couple of meetings during his two years on council, where he only saw that we were operating an installment loan business.

Valentin said his background includes law enforcement and he is liaison to programs and enterprises that fit his background. He wasn’t a part of LCO Financial Services, he said.

All information provided in the following article has been verified with documentation of meeting minutes, contracts, invoices and personal notes, and also after interviewing 12 persons involved.

The sections upcoming in this article, each telling their own story, include;

1.       Establishing LCO Financial Services

2.       Establishing the businesses

3.       The business accounting

4.       Cane Bay Partnership

5.       Cane Bay California lawsuit

6.       NAFSA and how it all began

7.       LCO investment in ITOGA

8.       Cane Bay websites

9.       Hummingbird and Blue Trust Loans

10.   The Complaints

11.   The Rosette Law Firm

12.   Operation Choke Point

13.   The current operation

14.   A Statement from LCO Financial Services

Establishing LCO Financial Services

Over the course of the first year in business, several LLC business names were set up under the original business plan, of which only one is actually doing business with the public, and yet, the LCO Financial Services Board of Directors has established themselves as managers of the various companies that exist only on paper.

After the first four businesses were set up, LCO Financial Services, Oasis Funds, Moccasin Gaming and Red Stone Investments, several more were created in the years to follow. Those include Oasis Funds II, Hummingbird Funds, Ladder Credit, Minaan Funds and Adaawam Funds.

Two of these businesses have payday loan websites, Blue Trust Loans, owned by Hummingbird Funds, and Ladder Credit, which is owned by Minaan Funds.

According to the operating agreements of each of these separate business entities, a salary will be paid to each manager. The original board members included Lee Harden and two other casino executives, Glenn Hall and John “Randy” Cadotte, who recently ran for tribal council and lost by one vote. Glenn Hall was removed on November 1, 2013 and replaced by Dulcie Rae Wolfe. All three have been appointed managers of the various companies. All three sat on the board of directors for each one and exchanged the titles of chairman, vice chairman and treasurer throughout.

Shortly after Financial Services was established, Lee Harden created a partnership with an off-shore company called Cane Bay Partners, which is under federal investigation for its payday loan practices in many states. The company is also under a lawsuit which goes to trial on March 26 of 2018 for illegal practices in the state of California.

The lawsuit stems from Cane Bay’s participation in MoneyMutual, the website promoted by talk show host Montel Williams in the late-night viewing hours of television several years ago. More on that later.

The two owners of Cane Bay Partners, Kirk Chewning and David Johnson, both live in St. Croix of the Virgin Islands, and are accused of using many American Indian Tribes across the country to set up dozens of these payday loan companies to operate outside state laws, because of tribal immunity. The scheme is called “Rent-A-Tribe.”

Our management contract with Cane Bay originally gave our tribe only 2% of the loan revenues, according to a former employee at LCO. If the LCO Tribal Governing Board was willing to invest $3 million into Cane Bay, they would have received a higher percentage at 5%, but former tribal governing board member Don Carley said they weren’t willing to put in that much.

In July of 2013, Mic Isham took over as chairman of LCO and immediately thereafter, Lee Harden went forward with the business plan and entered into talks with Cane Bay. Ultimately, LCO gave Cane Bay $1 million for the initial start-up, which gave LCO 2%.

According to a source close to the operations of these companies who wished to remain anonymous for fear of retaliation, a distribution has been made to the LCO Tribe from Cane Bay on a monthly basis ranging between $40,000 and $200,000. A similar payday loan company operated by the Rocky Boy Reservation called Plaingreenloans, which actually charges more reasonable interest rates around 30 to 40% and is made public to their membership, makes in excess of $12 million a year for their tribe.

LCO Financial Services was first proposed to the tribal council in May of 2013 by LCO Casino Manager, Lee Harden.

Establishing the businesses

On May 20, 2013, the tribal governing board passed resolution 13-36, which approved and established the Lac Courte Oreilles Financial Services (LCOFS). LCO Vice Chairman, Bill Morrow, signed the resolution acting as chairman in the absence of Gordon Thayer.

“I don’t know much about it,” Thayer said in regards to LCO Financial Services. “It really came about after I was chairman.”

A little more than a month after the resolution was passed, on July 5, 2013, new officers were chosen by the council, which included Mic Isham as chairman, Rusty Barber as vice chairman and Norma Ross as secretary-treasurer.

That next Monday morning, July 8, at their regular council meeting, the new chairman, Isham, moved forward with the new tribal enterprise. On the agenda was the appointment of Lee Harden as chairman of the board of directors for LCO FS. The motion to appoint him was made by Rusty Barber and seconded by Norma Ross. It was approved 4-0-0, with Don Carley and Larry Kagigebi voting in favor.

At the same meeting, Norma Ross and Mic Isham were appointed to the Native American Financial Services Association (NAFSA) board and Inter-Tribal Online Gaming Alliance (ITOGA), representing LCO. NAFSA is an organization that represents various Indian tribes engaging in the payday loan business, but with respectable fair practice standards. Isham is now the vice chairman of this organization.

ITOGA is an organization that was created to do an online gaming partnership between six tribes, each of which contributed more than a million dollars, LCO included, but was never launched and has a website that sits idle, but more on both these organizations later.

Speaking of the newly created enterprise when Thayer was still chairman, he said it was presented to the council by Lee Harden. “It was supposed to bring in all kinds of money, but I was apprehensive about it. After Mic became chairman, they never involved me.”

Other council members at that time, Little Guy Clause, Don Carley and Larry Kagigebi all said the same thing, that closed-door meetings were held in the chairman’s office in regards to the new enterprise and they never really knew much about it.

“They had their own little crew there,” Thayer said.

Don Carley said he never had anything to do with the company. He said Mic, Norma and Lee Harden had control of it.

“When we did discuss it in council meetings, we were told it was going to be a very lucrative business for the tribe,” Carley said. “It should have been very profitable, but I don’t know what it made for the tribe.”

Carley said Lee brought the proposal to the tribe and said the tribe could make a lot of money off of it, and, “At the time, we needed to make money, so we had our attorneys look at it and they said it was on the up and up. We had them check into these two guys from Cane Bay and our Legal Department said they were good guys.”

Carley said Lee Harden brought over the chairman from the Lac Vieux Desert to make a presentation about the payday loan business because they were involved in it and had experience.

Carley said this all happened towards the end of 2013 and into 2014, but that it took almost a year before the tribe saw any money from it, and from what he remembered, he said it was $25,000 here and there.

Gary “Little Guy” Clause, who was on the council at that time, said he never wanted the business on our reservation because it was charging high interest loans. He said he had heard the government was cracking down on the business in other states, but he didn’t realize that the Cane Bay Partners were actually under investigation.

“They came in here and said we were going to make mad money,” Little Guy said. “I don’t remember seeing any money coming out of it.”

Little Guy said he was never included in any closed-door meetings, only council meetings. “Mic had his hands in there and he didn’t trust me or open up to me about it at all. And I heard Lee was going to be running the financial services and I said right away, ‘how is he going to run this and be running the casino,’ but Legal came in and told us everything was going to be okay."

The tribal attorney at the time was James Schlender Jr. He was also the attorney who prepared the legal documents for the enterprise, which included the operating agreement, articles of organization and the bylaws. Schlender sat in the original board meetings of LCO Financial Services.

In the Articles of Organization, signed by Lee Harden on November 11, 2013, James H. Schlender Jr is listed as the statutory agent at 13394 W Trepania road, Hayward. The statutory agent is listed to receive legal notices or process.

Another former council member who sat on the council at that time was Larry Kagigebi. “I never heard of this getting off the ground. I remember talking about online gaming at a few meetings, but that was it,” he said.

An operating agreement for LCO FS was presented to the tribal council at that July 8, 2013 meeting, but it wasn’t signed until November 1, 2013, making it effective to govern the operations of LCOFS. It was signed by Norma Ross, as TGB member, Lee Harden, chairman of the LCOFS board, and David Fleming, Secretary-Treasurer of the LCOFS board.

In Sec. 3.2 of the operating agreement it provides that the company may hire a manager who runs all actions necessary for the business affairs.  In Sec. 3.2.4, it says “At the Board of Directors’ discretion, Manager may serve pursuant to an employment contract or simply as an at-will officer-employee of the Company.”

Section 3 also provides that the manager must abide by all requirements of tribal law including any reporting requirements and applicable federal and state laws. And manager shall have strict fiduciary responsibility to the company and to the TGB and shall at all times carry out business of the company.

Lee Harden was named manager of the company.

Similar operating agreements were set up in late 2013 and early 2014, along with Articles of Organization and Bylaws for three other companies, Oasis Funds, Moccasin Gaming and Red Stone Investments.

Dulcie Rae Wolfe was named manager of Oasis Funds. Randy Cadotte was named manager of Moccasin Gaming and David Fleming was named manager of Red Stone Investments. All four were members of the LCO FS board of directors and each individual board for the other three companies. Included in the board meetings were Jim Schlender, tribal attorney and Norma Ross, TGB liaison.

Over the course of four years, all these different LLC’s have held board meetings, and according to the source, they have held their meetings in Lee Harden’s office at the casino during regular business hours when they are all under pay from the casino or their other jobs. They pay themselves a stipend of $200 per meeting.

The Business accounting

According to an employee within the tribal accounting operations, Dulcie Rae Wolfe argued for the accounting of LCO FS and the other LLC’s established underneath it, to remain independent of the tribal accounting department, even though every other tribal enterprise had their accounting done within that department.

“Dulcie said it wouldn’t work for their employees to be paid on Friday’ like the rest of the tribal employees,” the employee said. “She wanted them paid on Wednesdays, so the decision was made to allow them to do their own bookkeeping and payroll.”

Another source close to the operation of LCO FS said the accounting is done through Roe & Meyer so that tribal members are clueless to what is actually being paid out in payroll, such as the board members naming themselves managers of each of the various companies, and to what is actually being generated for revenue.

“Even the credit union goes through us,” the accounting dept. employee said. “They pay their own bills, but we do their payroll. It was unusual for LCO Financial Services to do their own payroll.”

The employee said that in the beginning of financial services, Glenn Hall, another casino executive, was part of the original board of directors for LCO FS and he would send over regular monthly financial statements and reports. Hall was removed from the board in late 2013 when he was fired from the casino. That is when Dulcie Rae Wolfe came aboard, hired in his place. David Fleming took over Hall’s responsibilities with LCO FS. The employee said when Fleming took over, the reports came in sporadically. “Like maybe once every six months.”

In regards to the revenue that came in to accounting from LCO FS, the employee said when Norma Ross needed money to pinch, they came up with it. “Otherwise, they had very little money.”

The source close to the operations of LCO FS said anywhere from $40,000 to $200,000 was coming in every month, but the bank accounts for each individual company under the LCO FS banner were done at Chippewa Valley Bank and the books were done by Roe & Meyer, so the tribal accounting department may not have been aware.

In the Bylaws of the organization, approved by one signature, Lee Harden, November 1, 2013, it states in Article IV, Section 3 that the treasurer will keep accurate financial records of expenditures and is responsible for safeguarding the assets of the LCO FS.

David Fleming was given this title in the beginning. He was the tribe’s business manager overseeing the tribal enterprises. He now serves as manager of the LCO Country Store.

The source said Fleming wanted the accounting to be done through the tribal enterprise accounting department, but Dulcie Rae Wolfe said it was too much for the tribe’s accounting.

According to the source, Fleming resigned from LCO FS in the summer of 2015. The source remembered Fleming stating, “It was a lot to handle.”

The source also said LCO FS banking was done through Chippewa Valley Bank and there are at least five different statements that come in from the bank. They include Legal Reserve, Oasis 1, Oasis 2, Hummingbird and LCO FS.

“All money from Cane Bay comes into these accounts,” the source said. “Money was wired back and forth through Chippewa Valley Bank.”

On January 16, 2014, Lee Harden recommended to the tribal council to make William (Bill) Gouge Jr. the Director of Lending Authority. Gouge was the LCO Casino vault manager. He was never paid for his services.

According to the source, Gouge got leery of what documents they were asking him to sign and he opted out of the position.

In its recommendation to the tribal council, the LCO FS board said, “Bill has Title 31 and Bank Secrecy Act knowledge, well versed in compliance and would be an asset. This appointment by the LCO TGB would put the final pieces together for the banking initiatives of Oasis, Red Stone and Moccasin Gaming.”

Cane Bay Partnership

The LCO Financial Services board met in Lee Harden’s office on August 1, 2013, and part of the agenda included discussing the offer made to LCO by Cane Bay Partners VI, LLLP. Board members considered at what percentage of the gross revenue would they be willing to walk away from the deal, because, “there is some opinion within the Board that we are being low-balled on their offer of revenue split.”

The Board reported in their minutes that they needed to consider how much investment was needed to maximize their profits and limit the potential risk in launching the small dollar tribal lending portfolio.

The percentage of revenue would increase with a higher investment. Multiple sources confirmed that Cane Bay wanted $3 million for 5% of gross revenues, but the LCO TGB chose to invest $1 million for 2%.

Lee Harden told the board that Kirk Chewing, one of the Cane Bay owners, was eager to finalize the terms in the proposed partnership agreement.

Chewning visited LCO around this time and met with various tribal leaders to secure the deal which was approved by the LCO Tribal Governing Board at their meeting on September 9, 2013.

At their November 1, 2013 meeting, the LCOFS board had all their documents in place to begin their partnership with Cane Bay.

The Rosette law firm was contracted as the attorney representing LCO. They presented on July 13, an attorney engagement, flat fee, contingency fee agreement to assist LCO in their participation with ITOGA. Rosette also represented the ITOGA group itself.

The payment structure approved by LCOFS was for a total of $250,000, to be paid by $50,000 upon the execution of the legal transaction documents which virtually guarantee the launch of the on-line lending operation, and $10,000 per month for each successive 20 months from the first month of the lending operation launch. More on Rosette later.

According to the Cane Bay Partners website, Chewing is co-CEO, along with David Johnson. Chewning is listed as having 20 years of experience in the financial services industry. His experiences include commercial & consumer lending and regulatory compliance. He also has software development skills.

The website says Johnson has an educational background in computer information systems. His specialties include offshore call center operations, risk management, information technology, and marketing.

According to a news story from St. Croix, Virgin Islands on September 6, 2015 printed by Virgin Islands Free Press, “Island life has been good to David Johnson. Photos on the St. Croix resident’s Facebook (FB) page show him fishing in tournaments, partying on his boats, and chugging Fireball Whisky from the bottle.”

The article goes on to say Johnson won the island’s Christmas boat parade with a 65-foot yacht named Living the Dream, according to the event’s website. Chewning also won the tournament with a 49-footer called Renewed Interest.

According to the article, four former employees of the company said it’s not all what it seems. The four employees said Johnson and Chewning, along with a third man, Richard Clay, built a network of payday loan sites using corporations set up in Belize and U.S. Virgin Islands that obscured their involvement and circumvented U.S. usury laws.

“The sites Cane Bay runs make millions of dollars a month in small loans to desperate people, charging more than 600 percent interest a year, say the ex-employees, who asked not to be identified for fear of retaliation,” the news article reported.

Richard Clay, 51, founded Cane Bay with Johnson and Chewning after his chain of payday-loan stores called USA Payday Cash Advance Centers were ordered to shut down after being sued by the state for making illegal loans. He was sued in 2002 and the case dragged on till 2008. During this time, Clay moved into the online business with his new partners, who had worked together at a company that makes software for payday lenders.

“The three set up a network of websites based in Delaware and Nevada in 2005, according to a lawsuit filed by a fourth partner after he was ousted in 2008,” Bloomberg reported. The partners founded Cane Bay in 2009.

According to a national news story from Bloomberg News, released September 4, 2014, a private-equity fund, Vector Capital IV, LP, had raised $1.2 billion but had failed to invest half the money. Investors were frustrated, so three American businessmen on the islands of St. Croix, Cane Bay Partners, had a solution. Their network of payday-lending websites.

“Vector Capital IV LP, bought into Cane Bay a year and a half ago, according to three people who used to work at Vector and the former Cane Bay employees. One ex-Vector employee said the private-equity firm didn’t tell investors the company is in the payday-lending business, where borrowers repay loans out of their next paychecks,” Bloomberg reported.

Furthermore, the article stated, “Vector’s investment in Cane Bay shows the continuing allure of the payday-loan business, even after most states from California to New York restricted or banned it to protect consumers. The crackdown has driven borrowers online. Internet payday lending in the U.S. has doubled since 2008 to $16 billion a year, with half made by lenders based offshore or affiliated with American Indian tribes who say state laws don’t apply to them.”

Ronn Torossian, a spokesman for Cane Bay, said in an e-mail that the company provides services to financial firms and doesn’t make payday loans. “Cane Bay Partners is a management-consulting and analytics company,” wrote Torossian, head of 5W Public Relations. “In the past, the owners held minority positions in some licensed short-term lending businesses, which are no longer in operation.”

Bloomberg reported Cane Bay’s programmers, marketers and data analysts run CashYes.com, CashJar.com and at least four other payday-loan websites, the former employees said. Cane Bay registers the domains, designs the sites, approves the loans and analyzes the returns to adjust algorithms, according to the ex-employees.

“The loans were made by companies incorporated in Belize, a Central American country that lets foreigners set up entities that don’t pay local taxes or disclose ownership. When a state barred one site, Cane Bay would direct customers to another, according to the former employees.”

The ex-employees said Cane Bay had no business other than running the payday-loan websites and that Johnson and Chewning, both 41, directed operations for all of them, Bloomberg reported.

Johnson and Chewning referred questions to Torossian, who said the men wouldn’t agree to an interview. Neither the Belize companies nor the websites returned calls seeking comment when Bloomberg reached out.

The four former employees told Bloomberg that Johnson wears flip-flops and khaki shorts in the office, while Chewning, who handles day-to-day operations, likes to watch Fox News in the kitchen, often complaining about President Barack Obama.

Cane Bay California lawsuit

On March 26, 2018, Cane Bay Partners will be defending themselves in a jury trial in Oakland, Ca, along with talk-show host Montel Williams and Money Mutual. The companies are being sued for encouraging people to take out loans with illegal unlicensed lenders.

Late-night television ads featuring Williams supplied customers, four former Cane Bay employees told Bloomberg News.

“The company that runs the ads, MoneyMutual, doesn’t make loans. Instead, when people fill out applications, their names and data are fed into an electronic auction system called a ping tree. Lenders have seconds to decide whether to buy their information. The best leads sell for more than $100,” a September 4, 2014 article on Bloomberg.com reported.

Cane Bay owner David Johnson signed contracts with a MoneyMutual affiliate on behalf of CashYes and CashJar, two of their payday loan websites, according to Jeffrey Wilens, a Yorba Linda, California-based lawyer who discovered the documents when he sued MoneyMutual and Williams in 2013 for conspiring to make illegal loans. He expanded the lawsuit to include Cane Bay.

Williams’ public relations representative, Jonathan Franks, said Williams is just a spokesman for MoneyMutual and never had any dealings with Cane Bay. He and Money Mutual both denied the allegations in court.

David Johnson said he was only acting as a consultant when he signed contracts with MoneyMutual.

The Bloomberg article reported Wilens said, “that does not mean this ‘consulting’ is all that Cane Bay did and does with respect to the payday loans. Johnson set up various companies for the purpose of arranging illegal payday loans.”

NAFSA and how it all began

According to a report submitted to the LCO Tribal Governing Board on March 19, 2013, following a trip to the Reservation Economic Summit in Las Vegas, Lee Harden said the initial interest in online lending and online gaming began when he attended a meeting in Danbury, Wis in March of 2012, and another in January of 2013.

A presentation was made by the Rocky Boy Reservation tribal attorney, Robert Rosette, on his research and development of regulatory models he has proposed for the operation of legally defensible internet lending and internet gaming enterprises on tribal lands.

Harden said he invited Rosette to meet with the tribal governing board on February 22, 2013 at the tribal office.

Rosette invited any interested parties to attend the RES 2013 conference and observe the conduct of the Native American Financial Services Association (NAFSA), Harden said. This is the organization working at federal levels to protect the sovereign rights of tribes to conduct e-commerce.

“He also wanted us to meet the representatives of those tribes already conducting their own online lending businesses using his regulatory model and preparing to launch online gaming under his model for that in the near future,” Harden said.

Harden explained that NAFSA is busy in Washington DC and at the state level advocating for the legitimacy of online lending as a tribal enterprise.

“They are working hard to communicate the positive distinctions between predatory lending and what tribal online lending practices are as they are distinctly different,” Harden wrote.

As research of the websites operated by the LCO Financial Services, using the name of the Lac Courte Oreilles Tribe as the owner, it becomes clear that the LCOFS board didn’t commit to the model used by member NAFSA tribes.

Harden recommended to the board to examine the NAFSA website. “There is much more information about their credibility and the active role they are playing to protect financial enterprise through e-commerce on tribal lands.”

The NAFSA website proclaims their member tribes give short-term installment loans and states they are not payday loans.

“NAFSA members never engage in abusive collection practices or in any way disrespect or disregard the rights of our customers,” the site claims.

The site goes on to say unlike payday loans, installment loans are amortized, have a definite loan term and require payments that go toward not just interest, but pay down of loan principal. Unlike traditional payday products, installment loans do not “roll over” (where fees are assessed to maintain, but not pay down the loan), and by requiring payments be made toward the principal of the loan with defined payments, installment loans help deter the cycle of debt perpetuated by multiple, unchecked rollovers.

And yet, on the LCO owned website, Blue Trust Loans, it clearly states the interest charged on their loans. “APR’s range from 471.7846% to 841.4532% depending on the duration of the loan and the loan origination fees,” it states.

It also says they offer loans up to $1,250. LCO Financial Services director Trina Starr said Blue Trust Loans offers “installment” loans up to $300, in direct contradiction of what is stated on the website.

Starr’s explanation of what LCO Financial Services does fits with the model of member tribes of NAFSA, but directly contradicts what is published on the LCO-owned page, Blue Trust Loans.

There are dozens of pages of complaints at various online locations in regards to unfair practices by Blue Trust Loans, including “rolling over” the payments, whereby all of the payments go to interest, not the principal. More on that later.

Many tribes are operating legitimate online lending sites, such as the Rocky Boy Reservation, whose site Plaingreenloans.com generates $12 million for their tribe.

The source close to the LCOFS operations said the initial meetings held, there were good intentions, but after a change in leadership on July 3, 2013, when Mic Isham and Norma Ross took over the tribal governing board, LCO Financial Services began meeting with Cane Bay Partners and it all changed.

At the first meeting of the new tribal council on July 8, 2013, Mic Isham was appointed to the NAFSA board. Today, he is the Vice Chairman of the Board.

The NAFSA website also states, “E-commerce allows tribes to alleviate the economic burden of geographic isolation. The tribal profits derived from the TLEs go to fund essential governmental services and programs that tribes provide for their memberships and augment ever-dwindling federal grant program funding. These TLE revenues, which account for a significant portion of a tribal government’s operating budget, go towards providing vital social programs like health care services, housing assistance, home utilities subsidies, education for children, elder care and more. The businesses also create jobs within Indian country, reducing the unemployment rate and providing meaningful opportunity to tribal members within their own communities.”

The source asked why it seemed like there isn’t any money from LCO Financial Services making it to the membership. The source pointed out how many enterprises have closed recently and to the mold homes that weren’t fixed on the reservation. The source also referred to the Elder Christmas Bonus program that had been cut in the past two years.

“If we’re making so much money and it’s supposed to help our people, where is the help,” the source said.

The NAFSA site also claims it is offensive to accuse their member tribes of falling victim to “rent a tribe” schemes because the tribes partner with non-tribal lenders and continue their normal business operations with the tribe’s name on their product.

After reviewing Blue Trust Loans, this is exactly what is happening with LCO’s online lending operations.

“As tribes do not historically have access to their own capital, they negotiate for necessary capital to enter the industry, similar to other commercial industries and actions taken by non-tribal entities seeking to enter into a new business venture. These investments can come in many forms, including the acceptance of loans, issuance of bonds, securitization of debt, and more—all of which are common, available to every other business in the country. NAFSA member tribes retain complete control over the decision making necessary for their TLEs,” the NAFSA site states.

The site further states NAFSA member tribes and service providers are required to follow NAFSA’s established Best Practices and Bylaws to ensure responsible lending and advance industry-standard consumer protection safeguards.

“NAFSA Best Practices require members to follow all applicable federal lending laws and the tribes’ own regulatory compliance laws. All member tribes’ products are owned by the tribes for the benefit of their tribal government and communities. These tribes originate the loans on their reservations and assume the credit risk when making the decision to approve individual loan applications.”

As multiple sources have confirmed, the loans are originating from the Virgin Islands and through Cane Bay. The LCO operation doesn’t have any participation in the individual loan applications, which is in violation of the NAFSA Best Practices claim, which has the LCO Chairman, Mic Isham, seated as Vice Chairman of their board.

The NAFSA site lists the following Lending Best Practices that outline the requirements NAFSA members must follow when creating and servicing consumer products. It states, “because of these Best Practices, consumers can trust NAFSA members to honor their rights, protect their privacy, treat them fairly and constantly strive to offer them innovative alternative financial products.”

A tribal financial service company must operate as a legitimate tribal business; owned and operated by, and benefiting a federally-recognized sovereign nation and they must ensure all consumers are afforded the same protections by following the principles detailed in federal financial services laws to the extent that they are applicable and honor tribal sovereignty.

Laws to be used as guidance are Truth in Lending Act: United States federal law aimed at promoting the informed use of consumer credit, requiring standardized terms and cost disclosure and other regulations that emphasize and protect consumer rights.

Military Lending Act: United States federal law that limits the way short term loans, vehicle title loans and refund anticipation loans can be offered to military personnel and their families. The Blue Trust Loans website has in their disclaimer that they won’t even issue loans to members of the military.

The NAFSA website lists another dozen laws to be used as their guidance. Those can be viewed at their website.

According to finder.com/tribal-lending-guide, many tribes are conducting responsible lending operations.

“Tribal lenders can lend money to tribal and non-tribal borrowers, and they can even lend money to customers in states where payday lending is normally illegal. While many are legitimate and fair lenders, keep in mind that because they are a sovereign instrumentality, they cannot be sued,” Finder states. Blue Trust Loans has this posted in their disclaimer, that they cannot be sued.

Wisconsin is one of 17 states where payday loans are completely legal. 21 states have some regulations while 12 states completely outlaw payday loans.

Trina Starr said LCO Financial Services operates in 38 states and that Wisconsin is not included. Several past council members made it clear they didn’t want the tribes own company offering these high interest loans to our own tribal members.

The Finder website describes the online lending controversy like this, “Many American Indian tribes have the financial resources to be able to fund their lending business, and many are even members of the Online Lenders Alliance (OLA), which offers peace of mind to consumers. Unfortunately, many less self-sufficient tribes are engaging in illegal and irresponsible lending practices in order to gain revenue.

“Many tribal lenders will partner with a 3rd party, non-tribal lender to provide short term loans to consumers. The tribe operates as the official owner and collects a percentage of the APR. Both the tribal lender and the 3rd party lender are protected by the tribes immunity. This practice is often referred to as a ‘Rent-a-Tribe’.”

After the RES 2013 meeting in Las Vegas, Lee Harden made his recommendation to the LCO Tribal Governing Board.

“From the information obtained so far I believe internet lending is a viable source of funds and jobs for LCO and should be acted upon immediately. NAFSA is providing the communication to legislators that will protect the right to operate this business in an ethical manner. This provides an opportunity to derive revenue from a marketplace that is national in scope which can generate millions of dollars with disproportionately low operating costs and infrastructure requirements,” Harden wrote. “This is seen as a way to level the playing field with Tribes who have the benefit of being located close to metro populations with their casinos.”

LCO investment in ITOGA

At their August 1, 2013, LCO FS board meeting, payments to the Inter-Tribal Online Gaming Alliance (ITOGA) were discussed. They authorized making the second of three payments to this organization.

Over the course of the next few months, one of the companies under LCO FS, Moccasin Gaming, would be created, with Randy Cadotte named as its manager. This company was to be an online bingo operation ran as a partnership with ITOGA. Each tribe was given the option to be a part of one main website, or operate their own.

Moccasin Gaming was to be the LCO part of this operation. The initial talks of an online gaming site began even before the payday loan operation. In March of 2013, a contingent of LCO personnel, including the tribal attorney James Schlender, Lee Harden, and LCO Vice Chairman Bill Morrow all attended the Reservation Economic Summit 2013 in Las Vegas.

As part of RES 2013, the group met with attorneys from Rosette Law Firm and Sherry Treppa, chairperson of the Habematolel Pomo of Upper Lake tribe. Treppa was chairperson of ITOGA. The law firm set up the operational model for the online gaming venture.

According to the source close to the operations of LCO FS, the original model for this operation wanted 10 tribes to participate each investing $614,293. At the time of RES 2013, there were six tribes committed.

The model and all the details appeared to be a very profitable enterprise for the tribe to participate in, according to the source, so they decided to invest.

A payment plan was set up with ITOGA making an initial payment of $28,290.31. The second payment of $255,929,62 was made following the August 1 meeting and the final payment of $330,072.65 was invoiced November 13, 2013.

The source said all the payments were made from the LCO Casino.

Each payment was invoiced to Glenn Hall, LCO Casino. The final payment was invoiced for November 13, 2013, but at the LCOFS board meeting held on November 1, 2013, the group had voted to remove Glenn Hall because the LCO TGB had fired him from employment at the casino.

ITOGA couldn’t find other tribes to invest, so each of the original six tribes had to invest more.  Two more payments from the LCO Casino were made to ITOGA in the amount of $200,000 each, bringing their share to over $1,020,000, according to the source.

On November 1, 2013, Moccasin Gaming was incorporated, but it was never launched. The business still exists in name only. There is no online presence for Moccasin Gaming. And a search of ITOGA finds a one page website with no “About” information or contact information. The site doesn’t mention member tribes or any other specifics. The Contact Us page says it is not accepting submissions any more.

The one page of the ITOGA website said it is an alliance of several Native American Tribes from around the United States that recognize their sovereign right to economic self-determination.

What does ITOGA do? According to the site, “Through well-established tribal laws and regulations our member tribes of ITOGA are working diligently to further our people and provide economic opportunities through innovation and e-commerce initiatives.”

Nothing more exists about this group that the LCO Tribe, through the casino, invested over $1 million dollars, and no online gaming site owned and operated by the LCO Tribe exists today.

“And Lee Harden recommended our tribe get in bed with this group,” the source said.

Lee Harden wrote to the tribal governing board in his recommendations, “I recommend participation in ITOGA only if the tribal council feels ready to dedicate the appropriate people and funds. The decision to participate at the owner level would be an extremely lucrative position if this model is successful.”

Cane Bay websites

According to various reports and news articles, Cane Bay Partners is operating dozens of different payday loan companies, but the two most popular operated by the company themselves is CashYes and CashJar.

CashYes and CashJar operates with an address from Belize and at least two other websites operate with these same addresses, PayDayYes and CashDirectExpress.

1501 Hatcher Lane Suite B
Columbia, Tennessee 38401

Address:
Cash Yes
P.O Box 1469
Belize City, Belize C.A.

Additional Address: (Confirmed Oct. 20, 2013)
Cash Yes
P.O. Box 96503, #15050,
Washington, DC 20090

Additional Address:
Hong Kong Partners, Ltd.
Suite 508 Marina Towers
Newton Barracks Road
Belize City, Belize C.A.

CashYes operates under the ownership of Hong Kong Partners and CashJar operates under the owernship of Down Under Ventures.

According to the Bloomberg News article from September 4, 2014, regulators investigating Cashyes discovered, “A borrower had told his department that CashYes was calling her to collect more money after she had already paid $3,193.75 on a $775 loan.”

The regulators at that time confirmed that they weren’t able to trace CashYes beyond its Belizean parent company, Hong Kong Partners Ltd., but since those investigations, the link to all the sites has been made to Cane Bay Partners.

The Bloomberg article reports regulators at the time discovered more than 300 complaints to the Federal Trade Commission and at least 250 bankruptcy filings in relation to these websites.

“The cost for a $500 loan is between $100 and $150 in interest every two weeks, according to four contracts obtained by Bloomberg News. One contract, for a $700 loan, would result in the borrower paying back $3,675 over eight months unless a quicker payment plan was requested,” the article said. “Borrowers are asked to provide bank-account information, which enables the lenders to deduct payments directly, the contracts show. About a third of the complaints obtained from the FTC were by borrowers in New York, New Jersey and North Carolina, where payday loans are illegal.”

The Bloomberg article tells a story of one of these complaints.

Gina Smith, 42, a legal secretary in Mount Vernon, New York, a state where charging more than 25 percent is a crime, said she borrowed about $500 three years ago from CashJar, according to the article.

She said she needed money to pay rent and other bills because she was getting just $170 a week in disability payments while she was out of work for medical reasons. When she fell behind, the collection calls started, the article stated.

“They started threatening to come to my home,” Smith said. “They said investigators were coming to serve me court papers.”

The calls stopped when she filed for bankruptcy, she said.

More information revealed that over 150 other customers said in FTC complaints that debt collectors calling for CashJar and CashYes harassed them. One even said in an interview that CashJar called her boss, posing as a police officer. Another said in a complaint that the company called her sister and said she was a slut.

“My clients call me in tears because of these payday lenders,” said Charles Juntikka, the bankruptcy lawyer in New York who represented Smith. “I have to tell them you don’t go to jail over debts in America.”

The Bloomberg article goes on to compare the Cane Bay Partners payday loan site activities to organized crime stating that in the 1960’s, with usury laws widespread, loan sharks took over the business of payday loans, which had been around since the 1880’s in newspaper advertisements.

“The thousands of dockworkers who then plied New York’s piers were among the biggest customers. The loan sharks on the waterfront charged 15 percent a week -- about the same as CashYes and CashJar. Lacking electronic access to borrowers’ bank accounts, they would station themselves outside banks that catered to longshoremen and collect when the workers cashed their paychecks,” the article reported.

Online-Payday-Loans.org had many complaints reported against CashYes.

A reader wrote: “For an address I was given Suite 508 Marina Towers, Newton Barracks Road, Belize City, Belize. But when we were talking the gal mentioned that she was located in Georgia and then stopped short of saying any more.”

Another reader alleges: “I received some feedback that Cash Yes is an illegal offshore lender. They are likely to ignore anything you say.”

On February 25, 2013, a kind reader sent us the following allegations about Cash Yes: “Unorthodox collection practices, very high interest rate (greater than 400% APR) and draws monies directly from bank account before the due date.”

On August 7, 2013, we received these allegations against Cash Yes Direct: “They call my work. I had something very bad happen financially and they harass me. I can’t pay them back but I think I’ve already paid the principal back. I’m not sure. Anyway I want this to stop. Cash Direct Express is another name.”

On Oct. 20, 2013, we received these allegations against CashYes.com: “The company will not allow me to pay off the amount borrowed. The company keeps taking $150.00 out of my checking account monthly. When I finally got in touch with someone, I could not understand the man. I received an email saying that Cash Yes was going to debit my account on 10/25/13 for $800.00. I have been receiving threatening telephone calls from what seems to be the same person saying that I was going to be charged with federal litigation charges. These people call my home, cell, and work.”

On Nov. 21, 2013, we received these allegations against CashYes: “Received call from 217-402-9281. Person told me his name is Michael Black. Told me he was having a federal warrant issued for my arrest. I told him not to call this particular number. He continued to call and make threats. I had to change my phone number. Now he is calling on my cell phone 4 to 5 times a day.”

On January 18, 2014, we received more allegations against CashYes: “They debited the fee from my account. Then the same day they debited the entire amount of 500.00 dollars from my account causing me to overdraw. When speaking to them they said they were not sure the exact amount they had taken out of my account. Then when I asked if accredited by the BBB they didn’t know what I was talking about. Very unreliable and very unprofessional.”

Here is a statement reported at Ripoff Report about the two companies, “Cashjar.com & cashyes.com are the same company just different names. Both ran by Ann Stanton. They use two different websites to herd off the authorities when they are forced to close off doing loans in one state. Such as Cashjar.com cannot do loans in CA. so they tell the customer they are going to send them to a lender finder www.cashloansource.com which is also the same as the companies. It’s just a way of not letting the customer know that they are still in the same company and it throws the customer off by giving different company name. In actuallity the people are sitting across from each other playing games with the customers. Here is the document where they were shut down in CA. Report them still doing business in CA just under cashyes.com but it is the same company. Everything is exactly the same just different name of website.”

As reported in a segment above, Cane Bay Partners are named as defendants in a jury trial set for March 26, 2018, in Oakland, Ca. for their activities in that state.

In a segment below, titled The Complaints, you can read more of the complaints made against these companies through various reporting agencies, including the Better Business Bureau.

Hummingbird and Blue Trust Loans

One of the LLC companies under ownership of LCO Financial Services includes Hummingbird Funds, which operates the business name of Blue Trust Loans, a payday loan website. This is the largest and most active of the LCO-owned payday loan sites.

The site doesn’t follow the Best Practices standards set forth in the Native American Financial Services Association (NAFSA) membership guidelines, according to the source close to the operations.

The source said Mic Isham oversees the LCO Financial Services through Lee Harden. “He is the vice chairman of NAFSA, so his position on that board shows he is very active in the payday loan business.”

When you do a Google Search of Hummingbird Funds LLC, the most prominent and top listings for this company include many complaints of their deceptive practices, while also showing the ownership of this site by the Lac Courte Oreilles Tribe in Hayward, Wis.

One complaint submitted on July 15, 2015, said, “I was in a bind as I needed a new roof and other work completed on my home before I could place it on the market.  I filled out an application for Lending Tree and this was one of the offices that contacted me.  I was at work and distracted so shame on me, I paid dearly for it.  I opened a loan for $1000.  I did not see the disclosure page at all until I received it in email after agreeing.  Big mistake on my part, but shame on them.  I have worked in a finance office at a car dealership and we would be fired for non-disclosure. Come to find out that $1000 would have cost me $3535.86 had I not paid it off early.  The interest rate that I was not told or shown when I asked about it was 771.87%!  Beware of what you are signing.  I made a huge mistake, but they were very deceptive as well.”

Another complaint filed by David Sama on January 26, 2016 said, “I needed an urgent loan of $600. I obtained it through Hummingbird Funds, LLC, d/b/a Blue Trust Loans. I was charged $1,800.11 in interest for a total of $2,400.11 over six months! The interest rate was 766.78! To attempt to escape usury laws, the loan is funneled through a sovereign American Indian tribe. I paid the loan timely, and in full. Lender has repeatedly refused to return the note stamped paid.”

More complaints against Hummingbird Funds and Blue Star Loans can be read in the segment The Complaints.

At the BlueTrustLoans.com website, Hummingbird Funds has a disclaimer at the bottom of the page that reads as follows;

“Hummingbird Funds, LLC is a sovereign enterprise, an economic development arm and instrumentality of, and wholly-owned and controlled by, the Lac Courte Oreilles Band of Lake Superior Chippewa Indians (the “Tribe”), a federally-recognized sovereign American Indian Tribe. This means that the Hummingbird Funds’ installment loan products are provided by a sovereign government and the proceeds of our business fund governmental services for Tribe citizens. This also means that Hummingbird Funds is not subject to suit or service of process. Rather, Hummingbird Funds is regulated by the Tribe. If you do business with Hummingbird Funds, your potential forums for dispute resolution will be limited to those available under Tribal law and your loan agreement. As more specifically set forth in Hummingbird Funds’ contracts, these forums include informal, but affordable and efficient Tribal dispute resolution, or individual arbitration before a neutral arbitrator. Otherwise, Hummingbird Funds is not subject to suit or service of process. Neither Hummingbird Funds nor the Tribe has waived its sovereign immunity in connection with any claims relative to use of this mobile site. If you are not comfortable doing business with a sovereign instrumentality that cannot be sued in court, you should discontinue use of this website.”

The Blue Trust Loans website has their interest rates published on the page. APR’s range from 471.7846% to 841.4532% depending on the duration of the loan and the loan origination fees.

Although the Better Business Bureau has Blue Trust Loans rated F on a scale of A+ to F, the website claims, “We are an experienced lender with over 20 years in the personal loan industry committed to offering the timely solutions people need when they have short-term goals to meet. At Blue Trust Loans, we work with people in various situations and help them obtain the funds they need and make the process as simple as possible for you.”

It also states, “We started this business to help people.”

But the Better Business Bureau has an ALERT warning against the LCO Tribe’s payday loan company.

The BBB reports, according to the company's website, "Hummingbird Funds, LLC d/b/a “Blue Trust Loans” is the tribal lending agency of Lac Courte Oreilles Financial Services, LLC, an arm and entity of the Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Wisconsin, a federally-recognized sovereign nation located within the United States of America, and is operating within the Tribe’s Reservation." And, "The Tribe is a federally-recognized American Indian Tribe and enjoys governmental sovereign immunity. Because we and the Tribe are entitled to sovereign immunity, you will be limited as to what claims, if any, you may be able to assert against the Tribe and us. To encourage resolution of consumer complaints, any complaint may be submitted by you or on your behalf as described in the" Terms and Conditions on its website. "Your right to file suit against us for any claim or dispute arising from or relating to this Agreement is limited by the WAIVER OF JURY TRIAL AND THE TRIBAL DISPUTE RESOLUTION PROCEDURE provisions that you acknowledged and agreed to in the Loan Agreement."

In researching Blue Trust Loans and similar Native American owned sites, Maxlend was discovered and had a similar web page to Blue Trust Loans with the same information and disclaimers. Maxlend is a website wholly owned by the Three Affiliated Tribes of North Dakota. In the next segment about The Complaints, a 1-800 caller complaint reporting agency has many different complaints claiming that the same 1-800 numbers are calling for both Blue Trust Loans and Maxlend.

The Maxlend site has the same disclaimer information that Blue Trust Loans has, only the names are switched. It reads as follows;

“MaxLend, is a sovereign enterprise, an economic development arm and instrumentality of, and wholly-owned and controlled by, the Mandan, Hidatsa, and Arikara Nation, a federally-recognized sovereign American Indian Tribe. (the “Tribe”). This means that MaxLend’s loan products are provided by a sovereign government and the proceeds of our business fund governmental services for Tribe citizens. This also means that MaxLend is not subject to suit or service of process. Rather, MaxLend is regulated by the Tribe. If you do business with MaxLend, your potential forums for dispute resolution will be limited to those available under Tribal law and your loan agreement. As more specifically set forth in MaxLend’s contracts, these forums include an informal but affordable and efficient Tribal dispute resolution, or individual arbitration before a neutral arbitrator. Otherwise, MaxLend is not subject to suit or service of process. Neither MaxLend nor the Tribe has waived its sovereign immunity in connection with any claims relative to use of this website. If you are not comfortable doing business with sovereign instrumentality that cannot be sued in court, you should discontinue use of this website.”

The Complaints

800notes.com has a page for complaints against a certain phone number, 800-465-2797, that comes back to Blue Trust Loans and other payday loan sites on numerous occasions.

Reading through the complaints reveals how several sites are using the same phone number to make harassing phone calls for collections, and those sites are all connected back to tribes working as “Rent A Tribe” sites for Cane Bay Partners.

Liz reported on June 30 of 2015, “They're blue trust loan, I got this loan almost a year ago, I borrowed $500 to begin with and they diligently took $150 from my account every 2 weeks for about 6 months, then my account number changed and they start trying to hunt me down for more money, I told them to kiss my butt, they have gotten me for over $1500 and still calling for more? Please word of advice, please don't mess with this payday loan company, it's ridiculoucity of the highest order if there's any such word!”

Yoda replied to Liz and said, “Just another Tribal lender, BBB Review right here,” and then provided the link to the Better Business Bureau pages of complaints against Blue Trust Loans.

“So they are saying that they are above the law.  Maybe that means it is time to circle the wagons,” Wolfman replied.

Another reply said, “there's another one called northcash.com just like this.  At least on their web site they tell you they have an effective APR of 795%.  Be easier to blow off a creditor for an extra month and pay them, rather than get swindled into that kind of debt.”

And other complaints on the page include one submitted by Les submitted on Feb. 16, 2015, “received message to call Steve Malone at 8004690182. No company name, original number came in as unknown at 8:05 am.”

And another reference to Steve Malone, “I received a call from a Steve Malone asking me to call OnSpot Capital from this number and referred me to another number 800-469-0182. Please be aware of this number. Sounds like Steve was reading from his script,” submitted on March 18, 2015.

Renee said on March 14, 2015, “got a call from a girl named Devin asking me to return her call, but gave a totally different 800 number than the one she called from.  Can anyone say FRAUD?!?!”

Victoria said on June 24, 2015, “called and advised they were from MaxPayday regarding a "pay day loan" that i supposedly owe $1000 in account ending in "828" - I told them I've NEVER taken out a payday loan. They acted like it was no big deal and asked for the last four of my social - NOT!  Did not give that to them and told them so.  They then shuffled around and said no worries, they will remove my name.  DO NOT GIVE THEM ANY INFO”

Another report said on September 1, 2015 said, “they keep calling my work and don't leave a message. I read on other sites they are debt collectors or fraudsters. I don't owe any money and never give out my work number anyway. Block this number if you are able too.”

Ivy said on April 22, 2016, “called me and said they were with Maxlend. But after reading the posts on here I find it strange that this number belongs to more than just Maxlend. I answered and the lady didn't bother to tell me what company she was calling from. I had to ask she tell me the company she was calling from. What makes it more suspicious is when you answer and all they disclose is their name. You have a right to know everything about them when they call. If they refuse then you know they’re not legit!”

And on June 22, 2016, “I receive several calls a day, but never a message. Then I get text messages with a different number (800) 442-1026 to call (MAXLEND) is the company.  Which they have been paid back twice and over again.”

At the Better Business Bureau there are 6 pages of complaints against Blue Trust Loans, and after each complaint, there is form letter reply submitted by the LCO-owned company that states, “I am writing on behalf of Blue Trust Loans in response to a review made by you on the Better Business Bureau website. We apologize for your dissatisfaction with your most recent experience. Customer service is of the utmost importance to us. Please contact us at ************** between 7 a.m. and 7 p.m. CST Monday - Thursday, 7 a.m. to 5 p.m. CST on Friday or email us at *********************** to discuss the matter further. Sincerely, Blue Trust Loans Customer Service. Hummingbird Funds, LLC d/b/a “Blue Trust Loans” is a tribal lending agency of and a sovereign enterprise, wholly-owned and controlled by the Lac Courte Oreilles Financial Services, LLC, an economic development arm and instrumentality of the Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Wisconsin, a federally-recognized sovereign nation located within the United States of America, and is operating within the tribe’s reservation.”

Here are just a few of the complaints which can be found at bbb.org/wisconsin/business-reviews/consumer-finance-and-loan-companies/blue-trust-loans-in-hayward-wi-1000020487/reviews-and-complaints

This review was done by Mary A. on May 8, 2017. Mary stated, “I, like others trusted this was a good and fair company for a short-term loan. I was wrong. The first time I borrowed from them and paid off loan early, no problem. Second time I wanted to pay-off early they will not pro-rate the interest as stated in the loan agreement: You may prepay in full at any time and you will not incur an additional charge, fee, or penalty. This was their reply: Please be advised that the balance to pay off your loan on 05/10/2017 is $878.40 which includes the principal balance of $573.26 and interest fees of $305.14. Kindly confirm by the end of the business day today 05/08/2017 if you would still like to have the balance debited on 05/10/2017. Talk about greedy people! I find it hard to believe this company is owned by an American Indian Tribe. They should be ashamed!”

Jeff C. said on April 14, 2017, “Besides extraordinarily high interest rates (expected from a bad credit loan company), they try to rip you off at every turn. They will not accept partial payments at all, unless you call 3 business days before the automatic payment, (So they can charge the interest), and I tried to call to pay the loan off on a Friday, and they said it would take one business day to process the payment, which would be on Monday, and they charged me an extra $19 interest between Friday and Monday when they took the payment. Even for a bad credit company, they are horrible!”

Nancy W. wrote on April 11 of this year, “I have had a couple of loans with Blue Trust. While their service is fast that is the only thing they have going for them. I was told I could pay off my loan early however when I tried to make a lump sum payment today to bring my balance down I was told I couldn't set up a payment unless it was for my next due date the 21st. That is very convenient for them not so much for me because that means an additional $149 in interest. What they tell customers isn't true about paying early because you can only set it up for your due date. I will never use this company again and have already sent an email to the office of my State Attorney General. I noticed that all the complaints have the same response from them basically nothing.”

Terry T. said on March 24, “This company is a loan shark. The contract says there is no pre-payment penalty, yet I am being charged nearly $200 to pre-pay the loan. This company needs to be investigated both by the IRS and the Attorney General and Justice Department, both of whom I will be filing complaints with once the loan payoff goes through on Monday. Shameful that American Indians would participate in this scam.”

Anna R. wrote Feb. 24, “This company charges you outrageous amounts each day you have the loan. They also do not fully disclose information before you receive a loan. They have terrible customer service. They charged my account twice after I requested that it not be charged and for them not to. Which means it was an unauthorized charge. I'm addition, they refused to let me change my payment options to pay the balance due. So, it caused huge problems with my bank account. This company is terrible!”

Stephanie T. said on Dec. 7, 2016, “Just like everyone else, I needed the cash and I took out a loan with these people. NEVER AGAIN! Just be aware that if you have any issues with paying it back they WILL NOT help you out in any way. My checking account was compromised and me doing the right thing called to tell them that I had to change my checking account. But would like to see if we could work out something for me to pay this back because they had taken all the money out of my account and I didn't have enough to pay my other bills or feed my kids. I was told that as soon as we updated my account information that she would transfer me to someone who could help me set up a payment plan. Well She out right lied about that. The next person I talked to told me they couldn't do anything until the funds came back as insufficient then they MIGHT be able to do something. Really.....I have to pay more money because I wanted to do the right thing and just extend it a little bit. Thanks for taking the food out of my kids mouths. You are really a swell company. DONT EVER BOWRROW FROM THIS COMPANY. I can't wait to get this paid off, and I will never do this with a thieving company like this again.”

Stephanie then made another comment in response to the automated reply done by Blue Trust Loans on all of the complaints.

“You use the same generic answer when dealing with anyone from the BBB, I'm surprised it took you so long to reply to mine! Calling you does absolutely no good. I did the right thing and called when I had to change my checking account and your people were very untruthful saying they could help. But in reality you don't. You get the information you need and then totally screw someone trying to do the right thing. I have paid way more than the $300 I borrowed and every week I get farther behind because you people are crooks and just keep taking the money out.”

Ms. Smith wrote on March 31, 2016, “DO NOT USE BLUE TRUST LOANS!!! The company is a complete rip off. Please do not use unless you are desperate and this is your only option. *The interest is outrageous* I took out a $500 loan. I understood that I would be making biweekly payments of $113.46. I did not notice that I was being charged 637% interest over a 6 month period which would equate to my paying a whooping $1361.65 to Blue Trust for the initial loan. $500 initial loan amount - repayment to Blue Trust $1361.65 I am in shock!!!! I am angry....is this even legal? DO NOT USE BLUE TRUST (I plan to pay off earlier and will still be ripped off)”

Kt said on Feb. 26, 2016, “Please do not borrow from Blue Trust Loans! They are a rip-off!!! I have borrowed $600 and I am paying back triple! This is ridiculous! I have talked with customer service at Blue Trust and she explains to me I am paying back $24 and some change to every $100 I borrowed. Okay, I have made seven payments of $149.52, totaling $1,046.64. Customer Service never explained to me the additional interest until I saw this mess on their website, where I may add, it is hidden. I have borrowed from other cash advance places and have never owed this much. I still owe them five more payments! My total payment to Blue Trust will be $1794.24! There is nothing trust worthy about this company. BBB please look into this matter. Thanks.”

On September 2, 2016, D.H. said, “Not a happy camper with this company. In a financial crunch, I needed $300. The $300 cost me an additional $621 for a whopping payback total of $921 over a 6-month period of time. It should be illegal for companies to cash in on a person's hardship this way. I'm never using this company again. Just a word of caution!”

Many more complaints can be read at the link provided above.

Similar complaint pages across many platforms can be found against many other sites associated with Cane Bay Partners, including their own company CashYes.

Here is one more complaint made against them, “I obtained a 300.00 loan from this company and was led to believe there would be a $90.00 finance charge. I paid the finance charge on the first payment date, and to my astonishment I was charged another $90.00 finance charge two weeks later, with nothing applied to the loan principal.

“I later learned I would be charged $90.00 for the next two payments, again with nothing going towards the principal. The next payment would have been $140.00, with only $50.00 applied towards the principal. If I would have continued to make payments like this every two weeks, I would have paid over $1,500.00 for a $300.00 loan.

“This is a complete rip-off. These types of loan companies should not be allowed to operate like this. I do not have a problem with them making a profit for their services, but what they did to me was, I feel borderline illegal. I ended up paying off the loan, which cost me a grand total of $570.00.”

Here is a review of Cash Jar at the Better Business Bureau, submitted by Jane L. on August 26, 2016, “Do not borrow from this company--Illegal in NC. They are definitely crooks. I borrowed $600 in 2011. I paid $1165 back and they were still trying to take money from my account. I complained to the North Carolina Attorney General Consumer Complaint and received a letter telling me to stop payment to their ACH at the bank and send Cashjar a copy of the letter I received that said their business was illegal in NC. I did, and did not hear any more from them until 2 weeks ago. A man claiming to be with Sky collections called, demanding that I pay money or I would be terminated from my job. 5 years!!! I went to my bank and they suggested ignoring them. Then yesterday I got a call saying they were going to take me to court. They also called a friend threatening her. I complained again to the Attorney General and called the bank. I got my borrowed amount information and payment information together and faxed it to the Sky man. I was also told to call the police if he continued to harass me and my family and friends. Never again will I have anything to do with a payday loan company and I would suggest everyone stay away from this one.”

Here is one final complaint filed at the BBB about Cash Yes, submitted by KJT on January 12, 2013, “I was short of cash do to Hospital Charges and contacted Money Mutual whom then set me up with Cash Yes for a loan. I borrowed $775 for a one-time fee of $232.50 I was told by the company representative. This equals $1007.50 total for the initial loan and fee. I was also told that the money to repay the loan would be taken out of my bank account each payday (every 2wks.) in minimum $232.50 debits, unless I wanted to pay the loan back more quickly in which case I was allowed to pay more money back on a payday as long as it was more than $232.50., and I called the company up to let them know how much to debit my account at least 3 days prior to my payday. So far they have taken over $1212 from my account and claim that I still owe them over $985. They said that the first (4) debits of $232.50 from my account was interest/fees and the 5th debit of $282.50 was $50 toward the principal and the rest for fees. This company practices fraud and deception and should be sued in a class action lawsuit immediately!!”

The Rosette Law Firm

The Rosette law firm was contracted as the attorney representing LCO. They presented on July 13, 2013 an attorney engagement, flat fee, contingency fee agreement to assist LCO in their partnership with ITOGA. Rosette also represented the group itself.

The payment structure approved by LCOFS was for a total of $250,000, to be paid by $50,000 upon the execution of the legal transaction documents which virtually guarantee the launch of the on-line lending operation, and $10,000 per month for each successive 20 months from the first month of the lending operation launch. More on Rosette later.

Another document was retrieved, a contractual agreement from Rosette, dated for October 9, 2013 that shows another payment structure of $250,000 broken down as follows, $40,000 upon execution of the legal documents and launch of online lending site, with $10 per month to follow for 21 months. It was unclear on the documents whether this was the same agreement, simply rewritten, or if this involved separate LLC’s operating under the LCO Financial Services name.

The Rosette Law Firm attorney Rob Roseette, from New York, sent a letter threatening a lawsuit on behalf of LCO Financial Services if this article was published, dated, June 5, 2017.

The Rosette letter states Wisconsin Statutes about printing false and untruthful information to defame the legal business entity that the tribe operates, but LCO Today stands by all information provided in this article, which has been verified by documentation and multiple sources.

The Rosette letter claims that the tribe never paid Cane Bay Partners and that LCO Financial Services owns 100% of the websites, but this has been substantiated by multiple sources, including two members of the tribal council, a former director of LCO Financial Services and another source close to the operation.

The letter also claims there is no partnership with Cane Bay as a third party, and yet, just two weeks ago a press release appeared on the LCO Tribal Website with an announcement of a $2,500 scholarship donation to the LCO Golf Tournament held on June 3, 2017, by the “partners of LCO Financial Services.”

Rosette claimed in their letter that LCO Financial Services does not overcharge customers, but it clearly states on the Blue Trust Loans website, owned by the LCO Tribe, the interest rates applied, in excess of 800%.

The letter also states that Blue Trust Loans doesn’t offer payday loans, but rather installment loans and lines of credit. Yet, in order to receive one of these loans, one must provide and give access to their bank accounts for payments to be subtracted on paydays, as described by the multiple complaints and on their website.

Operation Choke Point

In 2013, the U.S. Justice Department started a new initiative called Operation Choke Point, aimed at pressuring banks to stop processing payments for lenders. The agency began looking at banks of any size on how they are enabling these businesses to illegally take billions of dollars from consumers’ checking accounts and whether they are collecting large fees for doing so.

A NY Times article from January of 2014 states, “The critical role played by banks largely plays out in the shadows because they typically do not deal directly with the Internet merchants. What they do is provide banking services to third-party payment processors, financial middlemen that, in turn, handle payments for their merchant customers.”

According to the Bloomberg News article cited earlier, “Regulators intensified their scrutiny of Internet lenders soon after Vector invested in Cane Bay. Prosecutors in New York filed criminal usury charges against a man in Tennessee they accused of running a network of payday sites based in the West Indies.”

But, according to the former Cane Bay employees who spoke with Bloomberg News, they weren’t involved in the New York case and had already arranged backup payment processors when Operation Choke Point started.

“Johnson and Chewning also were working on a deal with an American Indian tribe as a longer-term solution, the former employees said. They set up a new website, MaxLend.com, and a few months ago started redirecting borrowers there, two of the ex-employees said. Other than that, little changed, they said.”

MaxLend lists the Mandan, Hidatsa & Arikara Nation of North Dakota as its owner.

Bloomberg said Richard Mayer, who runs the tribes’ lending company, declined to comment.

“In the first action under Operation Choke Point, Justice Department officials brought a lawsuit in January of 2014 against Four Oaks Bank of Four Oaks, N.C., accusing the bank of being "deliberately ignorant" that it was processing payments on behalf of unscrupulous merchants — including payday lenders and a Ponzi scheme. As a result, prosecutors say, the bank enabled the companies to illegally withdraw more than $2.4 billion from the checking accounts of customers across the country,” the NY Times article reported.

The article went on to say, “The lawsuit, which includes reams of internal bank documents, offers the most vivid look yet at how some senior bank executives brushed off warning signs of fraud while collecting hundreds of thousands of dollars in fees. While the bank has reached a tentative $1.2 million settlement with federal prosecutors, the impact of the lawsuit extends far beyond Four Oaks, and federal prosecutors say this points to a problem rippling fast across the banking industry.”

A former Kansas attorney general, Stephen Six, said that without the banks help, it would be nearly impossible for these lenders to operate outside the U.S. regulatory system.

The current operation

The current LCO Financial Services company has Trina Starr listed as the Executive Director, but a source close to the operations said Dulcie Rae Wolfe is the actual hands on operator of the day to day business, handling contracts and negotiations. The source said Trina only runs the call center.

LCO Financial Services employs 12 people on the reservation at its offices next to LCO Conservation. Those 12 employees are call center qualifiers and agents. Their main job is to act as collections agents for outstanding payday loans.

Trina Starr said the qualifiers read from a script when they call clients who have outstanding loans. Once they get the clients to agree to a payment plan, the agents then take the call and try to get them back on schedule and make payments.

The call center for LCO Financial Services employs 10 callers, Trina and a compliance officer, McKenzie Cadotte, who happens to be the wife of LCO Financial Services board member and casino executive, Randy Cadotte.

Starr said Cane Bay Partners are the servicing partners in the operation. “They are like our vendors. They provide services such as analytics and marketing.”

The source close to operations said Cane Bay actually approves the loans and they also build the websites.

Curtis Decora, former LCO FS Executive Director, confirmed that everything is done at Cane Bay Partners. He said the call center would only call on delinquent accounts.

Starr confirmed that the tribe is operating only two of their payday loan websites, Blue Trust Loans and Ladder Credit. Blue Trust Loans is owned by Hummingbird Funds and Ladder Credit is owned by Minaan Funds.

Starr said they operate in 38 states, but do not service loans in Wisconsin despite that payday loans aren’t regulated in Wisconsin. The source close to operations said it is because they don’t want to do loans to people in the area because of the backlash of charging such high interest rates and possibly dealing with local complaints.

The other five businesses listed on the door to Starr’s office are currently inactive, she said. Those include Moccasin Gaming, Oasis Funds 1 and Oasis Funds 2, Adaawam Funds and Red Stone Investments.

The current board of directors for LCO Financial Services includes Chairman Lee Harden, Dulcie Rae Wolfe, Randy Cadotte, Di-Z Cross and Bill Trepania, who is the LCO Tribal Court Commissioner, working directly underneath the former tribal attorney who was an original part of the board, Jim Schlender Jr.

Schlender currently serves as the LCO Tribal Judge. The tribal attorney, Jason “Kekek” Stark, sits on the board as a non-voting member. Norma Ross also remains on the board as the TGB liaison.

It is unclear at this time how the make-up of each individual board looks, but according to the operating agreements, each of the nine different LLC’s set up underneath the LCO Financial Services banner have a board of directors and their own manager, all appointed from within their group.

Starr said the LCO FS enterprise generates revenue for the LCO Tribe.

“We have expanded and currently, we need more space,” Starr said. “It’s profitable.”

Decora confirmed, “Yes, it has to make money.”

Decora said when he was director before Trina Starr, he was asked to come to board meetings, make his report and then told to leave. He said he was left out of what the organization was doing, as far as revenues and decision-making.

“They just had me checking mail,” Decora said. “When I started making suggestions to expand and improve the business, it wasn’t long and I was out. I said right away, “we don’t need Cane Bay when we could be doing this ourselves.”

Decora was director of the call center for six months, leaving the position in June of 2015.

A Statement from LCO Financial Services

The following statement was issued on behalf of LCO Financial Services after all persons contacted, listed in the summary above, refused to comment on this article. The statement was issued by a person named Rob Ford, who simply said he represents LCO Financial Services, but no known employee works there. He didn’t identify whether he worked for the Rosette Law Firm.

The statement:

“Harming LCO Financial Services harms the Lac Courte Oreilles Tribe. LCO Financial Services (LCOFS) is critical to the financial independence and health of our tribe.

 “Attacking our success for partisan political interests is shameful. We are a small tribe and have actively and professionally pursued every meaningful economic opportunity for our community including the founding of LCO Financial Services.

 “LCOFS’s legally licensed and regulated lending entities are responsible contributors to this goal. In the last three and one half years, LCOFS has created income, jobs and scholarships for the tribe and will continue to do so under the direction and oversight of the LCOFS Board. It is shameful that partisan players are playing politics with a critical part of the community because of the upcoming election for the Lac Courte Oreilles Tribal Governing board.

 “LCOFS owns 100% of its portfolios, and any allegations that suggest otherwise are baseless.  The derisive and offensive use of the ‘rent a tribe’ term is an affront to the extensive and properly structured nature of our lending operations. LCOFS or any related tribal entities have never done any loan participations or equity sharing. LCOFS or its lending entities do not offer any payday loans, we offer installment loans or lines of credit. Spreading these falsehoods about LCO Financial Services is deeply harmful to the Lac Courte Oreilles Tribe.

 “LCOFS employs a variety of vendors and third parties who have expertise in ecommerce, internet networking, hardware management, software and related technology and risk analytics. Under the auspices of the LCOFS Board, each of these vendors has complied with our regulatory criteria and bring complete, professional and objective management to our business.   These and other vendors  help LCOFS   to be the most successful financial program for the tribe including nearly $50,000 in direct scholarships to tribal members, twelve (12) full time, on-reservation jobs with health benefits, and more.

“The LCOFS Board meets outside of company time and Board members receive a small stipend for each 4-hour board meeting, a reasonable and prudent compensation for the work required to serve both at meetings and the work necessary in between meetings.   No LCOFS board members are paid a salary from LCOFS or for this function other than the stipend.  LCOFS staff and board members spend a considerable amount of time learning and being trained by vendors, industry associations, legal firms and other third parties to ensure success and compliance of LCOFS.  These expenses have been paid per the LCOFS and Lac Courte Oreilles expense policies.

 “LCOFS actively participates in and is fully compliant with all NAFSA (Native American Financial Services Association) best practices.  The complaint rate for LCOFS is one of the lowest in the industry with less than 0.1% (.001) of transactions receiving customer complaints.  In fact, general customer satisfaction surveys have satisfaction for its product and companies at over 90%.

 “Simply, Harming LCO Financial Services harms the Lac Courte Oreilles Tribe. LCO Financial Services (LCOFS) is critical to the financial independence and health of our tribe.”

LCO Today response:

Mr. Ford claims the board meets for four hours at a time and outside the work hours, and yet, meeting minutes obtained show most meetings averaged just over an hour and one meeting lasted two hours. All the meeting minutes obtained were held in Lee Harden’s office during casino business hours between 8 am and 4 pm.

The stipend he claims was small, is $200 per meeting. They held board meetings for not only LCO Financial Services, but for the other LLC’s named under the company, Oasis Funds, Red Stone Investments, Moccasin Gaming and the others.

Mr. Ford said the tribe’s company operates within NAFSA, and yet, statements on the NAFSA website are in direct contrast with statements on the Blue Trust Loans website.

LCO Today stands by all information provided in this article as true and accurate, based on obtaining over 70 documents of meeting minutes, contracts, invoices and personal notes, and also after interviewing 12 persons involved.