Eight people, including insiders from the Ute Mountain Ute Tribe’s Financial Services Department, have pleaded guilty to a sprawling embezzlement and money laundering scheme that bled tribal funds for nearly five years. From at least 2011 through October 2015, employees exploited their positions to funnel cash meant for utility benefits and family plan accounts directly into their own pockets — and those of accomplices, including federal inmates. The fraud, uncovered by federal investigators, ripped over $600,000 from programs designed to support tribal members in need.
U.S. Attorney Bob Troyer, FBI Denver Special Agent in Charge Calvin A. Shivers, and IRS-Criminal Investigation’s Steven Osborne confirmed the guilty pleas this week in Denver. The stolen funds originated from two key tribal benefit systems: annual utility disbursements of $1,200 to $1,500 and family plan accounts that accrued to around $10,000 by the time a member turned 18. Legitimate requests required invoices or documentation, but insiders ignored the rules. Employees generated fraudulent tribal checks in the names of selected individuals—some of whom weren’t even tribal members—and split the cash after the checks were cashed.
Oraleigh Jaramillo aka Oraleigh Hammond pleaded guilty to one count of Embezzlement, Conversion or Misapplication of Property from Indian Tribal Government receiving federal funds and one count of Money Laundering, with restitution set at $309,537. Classia Rose Hammond admitted to receiving converted tribal funds, ordered to pay $65,508.56. Loia K. House must repay $22,190; Darrell Jonah Lee, $142,411; Kevin Ryan Lee, $89,132; Myreon Lehi, $23,280; and Ladelda Lopez aka Ladelda Box, $34,823. All eight were charged with receiving funds from a tribal organization that had been willfully misapplied.
The scheme evolved over time. Initially, fake disbursements were falsely tied to real utility or family plan accounts belonging to members who never requested them. Later, the fraudsters stopped pretending altogether—issuing checks with no legitimate account linkage. Tribal oversight failed to catch the theft for years, allowing the conspiracy to metastasize unchecked. Meanwhile, embezzled funds were also sent via Western Union to third parties, who kicked back portions to the employees who initiated the wires.
Investigators revealed that some of the stolen money was wired to inmates in the Federal Bureau of Prisons—individuals with no tribal affiliation and zero eligibility for Ute Mountain Ute benefits. The brazen nature of the transfers suggests a network built on exploitation and greed, stretching from tribal offices in southwestern Colorado to federal lockups across the country. Magistrate Judge David L. West accepted the guilty pleas, with sentencing scheduled in the coming months.
This case highlights the vulnerability of federally funded tribal programs to internal corruption. The Ute Mountain Ute Tribe, headquartered near Towaoc, Colorado, serves a population already facing economic hardship. The betrayal by trusted employees cut deep, diverting resources meant for heating bills and household necessities into private pockets. Federal prosecutors vow to continue rooting out such abuse, calling it a violation not just of law, but of community trust.
RELATED: Lenox Bank Teller Gets 10 Months for $378K Heist
RELATED: Tax Thief Siphoned $400K
Related Federal Cases
- Ute Mountain Ute Reservation Assault: Denezpi Sentenced to 30 Years · Colorado
- Hand Sanitizer Scam: $2.4M Grab Lands Colorado Man in Court · Colorado
- Terror Cartel Leader Busted in Texas: Tren de Aragua’s Fall · New Mexico
- Guatemala’s Perez Sentenced to Prison For Alien Smuggling Ring · Iowa
- Breckenridge Pilot Among Four Sentenced in Iowa Weed Ring · Iowa
Key Facts
- State: Colorado
- Agency: DOJ USAO
- Category: Public Corruption|Fraud & Financial Crimes|White Collar Crime
- Source: Official Source ↗
🔒 Get the grimiest stories delivered weekly. Subscribe free →
Browse More
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News