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Court seals settlement in former Mashantucket tribal member's fraud case

Documents related to the settlement of a lawsuit against Christopher Pearson, the former Mashantucket Pequot tribal official accused of defrauding investors in a Honduran real estate deal, have been sealed by the tribal court.

Terms of the settlement are "NOT subject to public/media knowledge," reads an entry made in the case file following a settlement conference last week. A request for dismissal of the case is expected by the end of this week, the entry indicates.

Pearson, meanwhile, is awaiting sentencing Feb. 17 in federal court on wire-fraud charges stemming from another failed development plan in Honduras. A jury convicted him on eight counts in November, prompting the tribe's elders council to banish him from the tribe.

The six plaintiffs in the tribal-court case, three of whom are, like Pearson, tribal members, alleged he breached an oral contract to partner with them on the purchase and development of land on the Honduran island of Roatan. In a brief filed in November, the plaintiffs claimed actual damages of more than $400,000 as well as more than $500,000 in "lost profits."

The plaintiffs, represented by attorney M. John Strafaci of New London, also claimed punitive damages equal to two times their actual damages "is appropriate."

Central to their case was the plaintiffs' claim that Pearson had diverted for his own use money they wired to Honduras for the purchase of 5.5 acres of land. Although the plaintiffs believed they were acquiring the parcel free and clear, the deed for the property contained a $262,000 mortgage held by the seller.

The parcel was to be combined with 4.5 acres Pearson had purchased on his own and ultimately with 62 other acres Pearson had optioned.

In a brief filed Jan. 12, Pearson's attorney, Conrad Seifert of Old Lyme, wrote that the case "involves a speculative real estate project in a third-world country among parties who have no signed operating agreement."

Seifert wrote that the seller "has never sought to collect a dime of any alleged mortgage money owed" and that the plaintiffs should have pursued the seller, not Pearson.

"In the end," Seifert wrote, "the case is largely about an unreleased mortgage in a Honduran deed and whether Mr. Pearson bears legal responsibility for obtaining the release. He does not."

In banishing Pearson, a former deputy chief operating officer of the tribe, the elders council ordered him off the Mashantucket reservation, where he owns a home, and cut off his monthly "incentive" payments, which come from the tribe's Foxwoods Resort Casino profits.

Tribal Judge Edward O'Connell, who heard the Pearson case, had granted the plaintiffs' motion to attach Pearson's reservation property and proceeds from a life insurance policy in the event they prevailed in the case. O'Connell ruled that he had no jurisdiction to attach assets of a $2 million estate Pearson inherited from his father.

b.hallenbeck@theday.com

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