“ The hearing stems from a Securities and Exchange Commission lawsuit that accuses Gold-Quest International, which claims to be affiliated with Little Shell Nation, of operating a Ponzi scheme that cheated 2,100 U.S. and Canadian citizens out of $27.9 million. In a Ponzi scheme, early investors are paid with money from new investors until the scheme collapses. The defendants said they were running a highly profitable foreign exchange trading program, but the SEC said it was a fraudulent enterprise operated out of Las Vegas. Defendants in the case have contended that they are immune from federal court orders because of their membership in the tribe, which is said to be located in North Dakota. Bent, battered, broken and bankrupt John Jenkins, a defendant in the SEC lawsuit, has been confined in a local jail since June 13 for failing to provide documents and information. The judge has fined Jenkins $500 a day for civil contempt until he complies with court orders and discloses information to a court-appointed receiver. In the hearing Tuesday, Dawson stopped short of ordering Baker arrested and jailed. “You are in an imaginary world where you belong to an unrecognized Indian group,” Dawson told Baker. The tribe appears to be created as a way of claiming Gold-Quest and individual defendants who belong to Little Shell Nation aren’t subject to U.S. laws, Dawson said. “You’re going to get yourself in a lot of trouble,” the judge said. “I have the utmost respect for you and your courts,” Baker said. “To the best of my knowledge, I wasn’t doing anything fraudulent.” Baker conceded that he wasn’t an Indian by birth, but added: “They have adopted me into their family.
June 25, 2008
