Federal authorities are investigating allegations that more than $50 million worth of surplus military equipment destined to be used by American Indian tribes was stolen and resold for huge profits.
Agents have seized more than $10 million worth of boats, trucks and earth-moving equipment. No charges have been filed, but U.S. Attorney Karen Schreier said last week that the investigation was just beginning.According to court documents filed by federal investigators and to officials familiar with the case, the deals worked like this:
Officials from the Sisseton-Wahpeton Sioux Tribe and the Seminole Tribe of Florida hired businessmen to obtain surplus military equipment in the tribes' name. The material included construction equipment, helicopters and even a machine designed to lay land mines.
Under federal law, the Bureau of Indian Affairs can lend surplus military equipment to tribes for work such as road construction, Schreier said. If the tribe wants to keep the machinery after 18 months, the BIA can donate it to the tribe.
"The purpose is to make sure it's being used by a government entity and it's not being sold," Schreier said.
But most of the equipment never made it to the tribes; instead, the middlemen sold it for huge profits or used it in their own businesses, federal investigators say.