Native Sun News Today: Lawsuit filed in fraudulent bond sale scheme

Wednesday, January 15, 2020

By Ernestine Chasing Hawk

Native Sun News Today Staff

Part I of a series

Note: Following publication of this article, the lawsuit was dismissed, effective January 8, 2021. See: Native Sun News Today: Wakpamni Community Lake lawsuit dismissed, December 9, 2020.

RAPID CITY – A lawsuit filed in October in the Wakpamni Lake Community Corporation scandal that defrauded retirement trust funds of $43 million, alleges three law firms and several individuals involved, failed to perform their due diligence in the issuance of “worthless” bonds and is waiting to go to trial.

The Wakpamni Lake Community Corporation, located on the Pine Ridge Indian Reservation, designated by the U.S. Census Bureau as one of the poorest areas in the Nation, was the victim of a complicated scheme orchestrated to use these unsica (poor) people as a front to enrich themselves.

The main perpetrators were caught and are currently serving federal jail time for securities fraud.

However the trust funds that were bilked out of $43 million believe more individuals and several law firms are culpable in the scheme and have filed suit.

Posted by Wakpamni Lake Community Corporation on Wednesday, December 25, 2019

Wakpamni Lake Community Corporation: A mounted bison graces the community hall in Wakpamni Lake.

The case, filed by Chicago Transit Authority Retiree Health Care Trust and the Board of Trustees for the Chicago Transit Authority Retiree Health Care Trust (RCHT) is aimed at the law firms Dilworth Paxson, LLP; Timothy Anderson; and Greenberg Traurig, LLP

According to the brief filed on October 18, 2019, in the Circuit Court of Cook County, Illinois County Department, Law Division the “lawsuit arises from the Defendants' participation in, and assistance with, the issuance of $43 million in worthless bonds (the "Bonds") to unwitting public pension funds, including RHCT. The Bonds were not part of a legitimate public finance project, but rather a criminal scheme to enrich several individuals connected to the Defendants, including well known fraudster, John Galanis, his son, Jason Galanis (collectively, the "Galanises"), and fly by-night tribal financiers, Steven Haynes and Raycen Raines, the latter allegedly was romantically involved with the Greenberg partner [Heather Dawn Thompson] representing the issuer during the transaction.”

According to the lawsuit Heather Dawn Thompson, a member of the Cheyenne River Sioux Tribe, who once served as a federal prosecutor and currently a partner at Greenberg Affiliated in their Denver office, was hired in 2014 by Raycen Raines the CEO of the WLCC to represent them in bond transaction.

The brief states, “In or about May, 2014, [Timothy] Anderson informed Raines that he would be representing the Galanis's and their companies in the bond transaction, and not his former client WLCC. As a result, Raines needed to find separate counsel to represent WLCC.

Heather Dawn Thompson ("Thompson") is a partner with Greenberg affiliated with its Denver office, but lives in South Dakota near or on the Oglala Sioux's Pine Ridge Reservation.

Thompson, who specializes in matters related to tribal law and economic development, served as Greenberg's primary client relationship attorney for the bond transaction.

Thompson was allegedly dating Raines, WLCC's CEO, at the time Greenberg represented WLCC in the Wakpamni bond transactions, and the two are now married.

Thompson was assisted by two partners from Greenberg's Denver office: Michael McGinnis and Jennifer Weddle. McGinnis is an experienced bond lawyer and member of the National Association of Bond Lawyers.”

According to the lawsuit Raines had previously incurred criticism for being involved in what was termed “predatory lending” practices in the set-up of online payday loan companies which allegedly put him at odds with the leadership of the Oglala Sioux Tribe.

Next Up: Hunter Biden, son of former vice president Joe Biden, implicated in Wakpamni Lake scandal. Later in the series: A response from Wakpamni Lake Community Corporation.

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Contact Ernestine Chasing Hawk at production@nativesunnews.today

Greenberg Traurig

The Greenberg Traurig firm has issued a statement in connection with the lawsuit. It follows:

"The fraud perpetuated against WLCC was a tragedy for all. WLCC was a victim of the fraud and its attorneys did not assist the fraud in any way. That is shown by the fact that neither WLCC or its attorneys were charged in the criminal proceedings against the wrong doers who have pleaded guilty.”