Gibbons accuser arrested in California
The software designer who sparked a federal investigation into Gov. Jim Gibbons after accusing him of taking bribes has been arrested on charges he passed $1 million in bad checks on the Strip.
Authorities arrested Dennis Montgomery, 56, on July 16 near Palm Springs, Calif., on a warrant out of Clark County.
Las Vegas authorities issued a warrant for Montgomery in June alleging he passed nine checks totaling $1 million at Caesars Palace in 2008.
The warrant alleges one of the checks was for $250,000.
He is facing one count of obtaining money under false pretenses and one count of theft.
Montgomery posted bail Tuesday night and was released from the Robert Presley Detention Center in Riverside, Calif. He is scheduled to be arraigned Aug. 17 in Las Vegas.
Montgomery, who authorities said lives in Rancho Mirage, near Palm Springs, did not respond to an e-mail seeking comment.
His attorney, David Chesnoff, said Montgomery is innocent.
"The authorities can call these bad checks, but they're really just markers," Chesnoff said. "He had no intent not to abide by the law."
Montgomery is the former chief technical officer for the Reno-based software company eTreppid, which had won military contracts for video compression and target recognition software with the Pentagon.
During the run-up to the 2006 gubernatorial election, Montgomery accused Gibbons of accepting bribes to help eTreppid secure military contracts.
In court papers, Montgomery accused Gibbons of accepting casino chips and $100,000 in cash during a star-studded, weeklong cruise in the Caribbean.
In 2007, the FBI opened an investigation looking into whether Gibbons improperly steered contracts to eTreppid in exchange for gifts.
The Department of Justice investigated the allegations and cleared Gibbons of any wrongdoing.
Montgomery's possible gambling problems surfaced in 2006 after the federal government and U.S Air Force began an economic espionage and intellectual property investigation into Montgomery.
His former business partner, Warren Trepp, told authorities in 2006 that Montgomery borrowed more than $1.3 million. Part of that loan was to pay off casino debts of about $300,000, according to a report by the U.S. Air Force's Office of Special Investigations.
At the time Trepp made the allegations, he and Montgomery were in a dispute over ownership of eTreppid software used by the military.
The Defense Department awarded eTreppid a no-contract bid for a potential maximum value of $30 million for its software. The technology was supposed to help unmanned drones such as the Predator find images on a battlefield.
But the military did not renew eTreppid's contract because the technology did not work, military officials had told the Las Vegas Review-Journal.
A federal investigation into Montgomery later revealed he ordered co-workers to manipulate demonstrations of the software to potential investors. One employee told federal investigators he staged these demonstrations about 40 times.
The employee finally refused to take part when officials from the Department of Homeland Security arrived to see for themselves how the software worked, U.S. Air Force records said.
Contact reporter David Kihara at dkihara @reviewjournal.com or 702-380-1039.
