Grand jury indicts Aubrey, Carl

Copyright © 2009
Gallup Independent
By Kathy Helms
Diné Bureau

WINDOW ROCK — Former Navajo Housing Authority CEO Chester Carl, 52, of Gallup, has been indicted by a federal grand jury in Nevada on charges of conspiracy, bribery, and embezzlement charges relating to a U.S. Housing and Urban Development grant program which funded development of low-income housing on the Navajo Nation.

Greg Brower, U.S. Attorney for the District of Nevada, announced Wednesday that Carl and William Aubrey, 66, of Mesquite, Nev., were charged in a federal indictment returned May 19 and unsealed May 27. Both men are charged with conspiracy to commit bribery relating to federal program funds and bribery relating to federal program funds.

Aubrey also is charged with two counts of embezzlement and theft from Indian tribal organizations.

Aubrey and Carl each could face up to five years in prison and a $250,000 fine on the conspiracy charge, and up to 10 years in prison and a $250,000 fine on the bribery charge if convicted. Aubrey also faces up to five years in prison and a $250,000 fine on each of the embezzlement and theft charges.

If convicted, the government also seeks forfeiture of any properties of the defendants derived from proceeds of the crimes of up to approximately $8.5 million.

According to the indictment, Carl was CEO of Navajo Housing Authority. HUD awarded federal grant funds to NHA for the construction and maintenance of affordable housing on the Navajo Nation. NHA awarded grant monies to Fort Defiance Housing Corp., a non-profit corporation, and Fort Defiance contracted with a private housing development company, Lodgebuilder, to develop the housing projects.

Lodgebuilder is owned and operated by Aubrey.

The indictment alleges that from about June 2002 to November 2006, Carl and Aubrey engaged in a bribery scheme in which Aubrey bribed Carl with $194,950 in casino gaming chips in exchange for favorable treatment to Aubrey’s company, Lodgebuilder.

In 2002 and 2003, Lodgebuilder benefited from several contracts signed by Carl totaling more than $38 million for the development of housing projects in Chilchinbeto, Springstead Estates near Churchrock, and Shiprock. Carl wrongfully permitted Aubrey and Lodgebuilder to control and use the non-profit corporation, Fort Defiance, as a “pass-through” to receive the federal HUD grant funds, the indictment alleges.

About $2.2 million of the funds, which were supposed to be used to pay vendors, subcontractors and expenses at the housing developments, allegedly were converted by Aubrey for his own personal use and used for gambling, the purchase of furs and jewelry, and expenses related to thoroughbred racehorse training.

Carl also allegedly caused NHA to respond favorably to inadequate disbursement requests submitted by Fort Defiance and Lodgebuilder, to Aubrey’s failures to pay vendors and subcontractors, and to questions and concerns about Aubrey’s business practices.

Aubrey and Carl appeared Wednesday before a U.S. magistrate judge in Nevada and pleaded not guilty to the charges and were released on personal recognizance bonds pending trial.

Carl currently is director of tribal business development for Foresight Wind, a venture partner with Edison Mission Energy, to develop Aubrey Cliffs, a proposed wind farm on the Big Boquillas Ranch owned by the Navajo Nation.

In November, Carl and representatives of Edison Mission sought a modification to the Big Bo master lease from the Resources Committee in order to begin phase one construction of Aubrey Cliffs.

Under terms presented to the committee, Navajo would be able to acquire up to 51 percent equity in Aubrey Cliffs but would be expected to put up Big Bo as collateral for a long-term loan guaranteed by Navajo Enterprises, a company owned by Texas billionaire B.J. “Red” McCombs and partner Bob Honts.