Federal Sentencing Contradicts Claims Heart Butte School District Financial Crisis Was Resolved

GREAT FALLS — The federal sentencing of a former Heart Butte School District employee for embezzlement reveals ongoing financial troubles at the district, contradicting earlier official assurances that the school’s budget crisis had been resolved.

Jonnie Jo Fransis Spotted Eagle, 37, of Browning, was sentenced Monday to 25 months in prison followed by three years of supervised release after pleading guilty to wire fraud and aggravated identity theft for stealing over $30,000 from the district. Chief U.S. District Judge Brian M. Morris presided over the sentencing.

The timing of the federal prosecution undermines claims made in March 2024 by interim Superintendent Greg Upham, who told media outlets that “Heart Butte Public Schools is open for business and will be open for business in the ’24-25 school year. And I’m confident that the budget will be in order.”

Spotted Eagle plead guilty in April — more than a year after his confident assessment that the district’s finances were stabilized.

According to court documents, “while working for the Heart Butte School District, Spotted Eagle embezzled funds by using school credit cards and purchase orders, presenting such orders to local grocery stores, and obtaining and using gift cards for her own personal benefit, none of which was authorized.” She forged the names of school employees to cover up the fraudulent transactions.

Spotted Eagle’s embezzlement was part of a broader financial crisis that threatened to shut down the district entirely. An internal review revealed the scope of financial mismanagement: nearly $300,000 in unauthorized transactions on district credit cards, with at least one employee allegedly using district purchasing cards for personal use totaling roughly $70,000. The district also accrued $1.45 million in debt due to mishandling of payroll taxes and retirement benefits.

Court documents in Spotted Eagle’s case do not clarify whether her $30,000 embezzlement is part of the $70,000 in unauthorized spending by “at least one district employee” reported in 2024, or represents separate criminal activity. The discrepancy between the amounts suggests there may have been multiple instances of employee theft, though this has not been confirmed by federal prosecutors.

By January 2024, the district feared total debt could reach $3.5 million by year’s end, potentially forcing closure of the school serving 188 students.

“These children, they already experience a great deal of insecurity, like food insecurity, so to rip the support out from under them could really change the trajectory of their life in a negative way,” Tara Walker Lyons told KRTV at the time.

The district’s troubles first came to light in February 2023 when MTN News reported on alleged misappropriation of funds within the school district.

Despite receiving around $700,000 in unspent COVID-19 school relief funding to help stabilize finances, the federal prosecution of Spotted Eagle suggests the district’s financial controls and oversight remained problematic well into 2025.

The district hired new leadership in 2024, with Marcy Cobell taking over as superintendent in July 2024 and Christy Day Chief serving as principal. Cobell has emphasized “controlled spending while also getting every reimbursable we can.”

Heart Butte School District Superintendent Mike Tatsey declined to comment when contacted by MTN News in January 2024.

Assistant U.S. Attorneys Ryan Weldon and Kalah Paisley prosecuted Spotted Eagle’s case. The FBI conducted the investigation.