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FBI Suspected Mescalero's Chino of Slot ScamFBI Suspected Mescalero's Chino of Slot Scam

Thursday, May 24, 2001

By Larry Barker
KOAT Investigative Reporter
    Newly released FBI documents show Mescalero Apache leader Wendell Chino was being investigated for possible tax evasion, embezzlement and money laundering at the time of his death.
    About 1,000 pages from Chino's FBI file were released to KOAT-TV in Albuquerque under the federal Freedom of Information Act.
    The documents show Chino first came under FBI scrutiny in December 1995 after he made a series of sizable cash transactions.
    "The primary thrust of this investigation is the alleged violations of tax fraud and tax evasion," according to an FBI report dated September 1996.
    "There is speculation as to embezzlement from tribal funds as being the primary source of income which sustains the gambling habits of captioned subjects," the report says.
    Documents in FBI investigation files include unconfirmed statements, allegations and opinions.
    "No one should assume Mr. Chino did or didn't commit a crime because this matter had not even reached a point where the United States attorney had determined if he wanted to present it to a grand jury, let alone have an indictment returned," said former U.S. Attorney John Kelly.
    Chino was leader of the Mescalero Apaches for more than 40 years. He died of a heart attack in November 1998 while running on a treadmill in a California health spa.
    FBI informants claimed Chino won tens of thousands of dollars at the Mescalero slot machines.
    According to documents in the file, one unidentified source told the FBI, "Chino is a constant winner at the slot machines in the casino (Casino Apache). Whenever Chino comes to the casino to gamble he calls the casino before he comes and upon his arrival is escorted to certain slot machines which have been altered. It is at these machines that Chino wins a lot of money."
    The Albuquerque Journal reported in March 1999 that Chino and wife Rita cashed in slot-machine jackpots and credits of more than $270,000 at the casino in 1997 and 1998.
    The documents obtained by the Journal didn't show how much the Chinos had wagered on the machines, making it impossible to determine whether the couple won or lost over the two-year period.
    FBI spokesman Doug Beldon said the investigation of Chino was shut down four months after his death.
    Although there were other subjects under investigation, the U.S. attorney ended the investigation because it had "not produced evidence sufficient to file criminal charges."
    In May 1996, one FBI agent noted in the file that "much more investigation has to be done to determine if Chino is involved in embezzlement. We have to work on that reservation every day. We have to be certain that we have an excellent case before we execute any search warrants
and possibly incur hostile reactions from tribal members."
    The FBI files show agents had Chino and other individuals under surveillance and their telephone records were scrutinized during the four-year probe.
    Agents found the powerful Mescalero leader traveled on average three times a month to Las Vegas, Nev., in the tribe's Lear Jet.
    One agent wrote in 1996, "The goal of this investigation is to prove that captioned subjects are skimming funds from the tribe's gambling operation, traveling to Las Vegas with the cash and gambling the funds away."
    In September 1996, records show, the U.S. Attorney's Office prepared search warrants seeking evidence in the case.
    According to the released documents, "The main focus of the searches will be business records and gambling records indicating tax evasion, failure to report income and/or embezzlement from a tribal organization."
    But federal prosecutors put the search warrants on hold in early 1997; they were never served.

This article was prepared by KOAT-TV investigative reporter Larry Barker and Target Seven producer Charles