A former accountant for the Pechanga Band of Luiseno Indians and an ex-insurance broker stole about $4 million from the tribe by diverting funds reserved for insurance coverage, a prosecutor alleged today.
But the defendants' attorneys said the case stems from a business dispute and nothing more.
James William Riley, 48, of Corona and Ryan Jay Robinson, 41, of Temecula were indicted in February 2010 on multiple felony charges stemming from a scam that the pair allegedly perpetrated between 2005 and 2007.
Riley -- a former insurance broker and partner at Riley, Garrison & Associates -- could face 15 years in prison and six-figure fines if convicted of three counts each of grand theft, commercial burglary and money laundering.
Robinson, the Pechanga tribe's former chief financial officer, is facing up to 10 years behind bars if convicted of grand theft and three counts of burglary.
As the men's trial got under way Wednesday, the prosecution called witnesses who explained the process of setting up property and liability insurance policies and deciphering cost breakdowns.
Riverside County Deputy District Attorney Jeanne Roy displayed copies of documents drawn up by Riley that revealed how, in a one-month span in 2006, premiums on an insurance policy for the Pechanga Development Corp. went from $555,000 to $1.32 million.
Roy alleged the sum was artificially inflated by the defendant, who pocketed $410,000 in “fees” from the transaction. The prosecutor told City News Service that Riley and Robinson allegedly began scamming the tribe shortly after Hurricane Katrina in September 2005.
Commercial insurance rates went through the roof following the disaster, enabling the defendants to justify exorbitant insurance costs from which they were profiting, Roy said.
“Mr. Riley was living the high life,'” she said, adding that Robinson used the $190,000 he allegedly received in kickbacks to “pay off his gambling debts.
“The bottom line is, when the interim CEO for Pechanga asked these two defendants in 2006 why the tribe's insurance costs were so high, they never answered the question,” Roy told CNS.
According to Riley's attorney, Souley Diallo, his client never committed a crime, and the prosecution's case boils down to a misunderstanding of complex financial arrangements.
“This is a dispute between sophisticated business people over commercial transactions,” Diallo said.
“It should never have ended up in a criminal court.”
Chris Jensen, Robinson's legal counsel, acknowledged that his client received $190,000 in cashier's checks from Riley, but said there's no evidence that the funds were part of a bribe or arose from a conspiracy to rip off the tribe. The trial is expected to last about two weeks. Riley is free on $1 million bail, and Robinson is free on a $120,000 bond.