- Associated Press - Friday, September 12, 2014

BILLINGS, Mont. (AP) - Two former Bureau of Land Management employees in Virginia are charged with defrauding the government, one by abandoning his federal job and returning to Montana to work for the Chippewa Cree Tribe and the other by covering up his absence.

Larry Ray Denny, of Box Elder, and John Grimson Lyon, of Clifton, Virginia, pleaded not guilty to wire fraud, false claims and theft of government property during recent arraignments in U.S. District Court in Great Falls, The Billings Gazette reported Friday (http://bit.ly/1pWDVvw ).

Denny, 66, also denied a charge of filing false statements regarding outside income during his Sept. 4 hearing. Lyon was arraigned Aug. 19.

Denny abandoned his BLM post, with the knowledge and approval of Lyon, to relocate to Montana for other work “without relinquishing payment” as a BLM employee, Assistant U.S. Attorney Ryan Weldon wrote in the indictment.

A phone call to Denny’s attorney, Penny Strong of Billings, rang unanswered Friday. Lyon’s public defender, Evangelo Arvanetes, said he had just been assigned the case and was not familiar enough with it to comment.

Prosecutors allege Denny left his BLM job in July 2012, reportedly to “overcome health-related issues.” However, Denny returned to Montana where his company, Denny Technical Services, had a contract with the Chippewa Cree Tribe in north-central Montana for drilling-related services.

For a year beginning in March 2012, Denny received about $67,243 from the tribe in addition to his $112,000 annual salary and benefits as deputy state director for natural resources for the BLM’s Eastern State’s Office in Springfield, Virginia, the indictment said. Prosecutors allege Denny did not report about $49,000 in income he received from the tribe on a federal financial disclosure report.

Meanwhile, Lyon, 60 - the BLM state director for the Eastern States - used federal health care laws to avoid answering questions about Denny’s supposed health problems and gave him an “exceptional” job performance review in 2012, entitling Denny to a $3,200 cash award.

An investigation found that during the time Denny was reportedly dealing with health issues he visited various golf courses and traveled to Las Vegas, Arizona and around the state.

From July 2012 through March 2013, the BLM paid Denny for 550 hours of regular work, 461 hours of sick leave, 389 hours of annual leave and 72 hours for federal holidays, the indictment said.

The government is seeking $112,000 in restitution.

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Information from: The Billings Gazette, http://www.billingsgazette.com

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