It is important to realise that this is a fantastical story that is used almost allegorically by Alexie to highlight the way in which Native Indians are still mistreated and discriminated against by white society. This is shown of course through the crime of Thomas having killed an American soldier in a past life in a battle that occurred so long ago. Thomas' stories allow him to speak about the fate that befell his people in the past, and this is implicitly juxtaposed with the way in which his people are still being oppressed in today's world. Notice the way in which Thomas's behaviour is described:
A storytelling fetish accompanied by an extreme need to tell the truth. Dangerous.
As Thomas tells his stories and speaks the "truth," it is the truth of white exploitation and discrimination against Indians that ends him up in jail as he tells the story of white dominance and how Indians suffered. The quote from Kafka at the beginning of the story underlines the way in which the American system of justice is so impartial and prejudiced towards Native Americans.