GRAND RAPIDS, Mich. — A Chicago man will spend two-and-a-half years in prison for his role in a fraudulent economic development scheme that cost the Grand Traverse Band of Ottawa and Chippewa Indians more than $1.1 million.
Britan Douglas Groom, 66, was sentenced in federal court on Monday for conspiracy to commit wire fraud against the Tribe. U.S. District Judge Robert J. Jonker also ordered Groom to spend 3 years on supervised release, to pay restitution of $1.1 million and to forfeit $302,052.00 in proceeds he personally received from his fraud.
“This fraudulent scheme hurt every member of the Grand Traverse Band of Ottawa and Chippewa Indians,” U.S. Attorney Mark Totten said in a statement. “Instead of using the funds for the benefit of all tribal members, Groom and his co-defendant lied to the tribe and used the money for their personal benefit.”
From December 2015 to December 2016, Groom’s codefendant, Chester Randall Dunican, served as the chief executive officer of GTB LLC, a tribal entity focused on the development of economic opportunities for the benefit of all members of the Tribe.
According to a release from the U.S. Attorney’s Office, Dunican represented to the Tribe that he had obtained exclusive distributorship rights with a proprietary water filtration company, R.O. Distributors, and that the Tribe would benefit by investing in R.O. Distributors and leasing water coolers in Michigan and Florida.
In reality, R.O. Distributors was a shell company created and controlled by Dunican and Groom, the release alleges. The Tribe invested nearly a million dollars in R.O. Distributors — more than $700,000 of the funds were transferred to the personal bank accounts of Groom and Dunican through a series of transactions.
Dunican later told the Tribe that he needed additional funding because he expected the business to grow. When the Tribe resisted, Dunican told the Tribe that a multi-billion company named High Sierra Distributors, LLC, acquired R.O. Distributors and planned to expand the water filtration business nationwide.
According to the release, Dunican asked Groom to recruit someone to pretend to be a corporate representative of High Sierra at a meeting with the Tribe to pitch the additional $2 million in funding. Groom recruited a friend from Illinois who did attend the meeting pretending to be a corporate official of High Sierra. Shortly after the meeting, and before any additional funds were distributed, the Tribe discovered that this individual was actually a schoolteacher from Illinois, uncovered the fraud scheme, and fired Dunican.
“This defendant knowingly defrauded and stole money from people who trusted him to act in their best interest,” James A. Tarasca, special agent in charge of the FBI in Michigan, said in a statement. “His behavior – and the behavior of his co-defendant – is a betrayal of the entire Grand Traverse Band of Ottawa and Chippewa Indians. The FBI will continue to investigate these types of fraud and hold criminals who commit them accountable.”
A sentencing hearing for co-defendant Dunican is scheduled at the federal courthouse in Grand Rapids, Michigan on February 14, 2023, at 4 p.m., before Judge Robert Jonker.
Tribal Business News reached out to the Tribe and will update this story with any additional information or comment that's provided.