The Mashantucket Pequots, struggling under a mountain of debt connected with the Foxwood's Resort Casino and MGM Grand, may be getting some answers on how their operation went from boom to bust.
A federal grand jury Friday indicted Michael Thomas, their former chairman, and his brother Steven, who served as treasurer, on charges of stealing nearly $900,000 in tribal funds and using the money for personal expenses.
Both are expected to appear before U.S. Magistrate Judge Joan G. Margolis late Monday afternoon and enter not guilty pleas to a charge of theft from an Indian nation, which carries a maximum five year prison term, and two charges of theft from a Indian tribal government receiving federal funds, each of which carries a maxim ten year term.
The cases have been assigned to U.S. District Judge Janet Bond Arterton.
The FBI began investigating the pair in 2010 following complaints about tribal finances.
Their investigation determined that Michael Thomas, who chaired the tribe from 2003 until August 2009, allegedly stole at least $102,393 by charging personal expenses for which he made no reimbursements. The thefts allegedly occurred between October, 2007 through April, 2009. The indictment also seeks forfeiture of two computers.
His brother, Steven, who served as the tribe's director of natural resources protections before being elected treasurer, is accused of stealing at least $739,744 between January 2005 through June 2008. The government is seeking forfeiture of those funds.
However, both brothers filed for federal bankruptcy protection, and Michael Thomas was granted a discharge of his debts in April.
The investigation is ongoing and being prosecuted by Assistant U.S. Attorney Christopher Mattei.
Bill Satti, the tribe's spokesman, did not return calls for comment Friday.
In March, the tribe's financial crisis had become so bad that it stopped making monthly payments from casino revenue to its members.
The tribe's casino opened in 1992 and with the money rolling in embarked on an expansion program which included spending $700 million to build the 30-story MGM Grand casino, hotel and performing arts theater.
Gradually the tribe began reducing its monthly payments to tribal members which reached a low of $500 before stopping altogether in the spring.
In a 2009 letter to his members, Michael Thomas cited the souring Connecticut economy as a reason for the gambling profit fall off. "These are dire financial times for our tribe. The situation is serious and threatens our tribe," he said.
At the time the tribe's debt was estimated to be $2.3 billion. In 2011 Standard and Poors issued the tribe its lowest rating to D .
This past October the tribe restructured its multi-billion debt.