In another unfortunate ding on public trust, a former auditor in the South Dakota Department of Revenue has been indicted for fraud.
Steven Arthur Knigge of Rapid City was arraigned Friday on federal charges of conspiracy, wire fraud, bank fraud, money laundering, and tampering. (See U.S. District Court, South Dakota, Western Division case #16-cr-50037-JLV.) The feds say Knigge sent e-mails to five banks last summer (two in Arizona, one each in Georgia, Texas, and Washington) telling them to wire funds to his accounts at Black Hills Federal Credit Union and Wells Fargo Bank in Rapid City. Two of the banks receiving these e-mails smelled a rat pretty quickly and blocked the transfers. The Washington bank transferred $18,700 to Knigge on July 14, 2015, and he withdrew $8,500 in cash right away and wired funds to someone named Scott Kasley. When he tried to wire more to Kasley the next day, Black Hills Federal Credit Union clamped down, saying that the account holder back in Washington hadn’t authorized the payment. Knigge said the money was his, but Black Hills Federal Credit Union sent the remaining funds back to Washington.
With BHFCU onto him, the feds say Knigge began using his Wells Fargo account for fraud. One smart bank blocked an August 12, 2015, request, but on August 19, Knigge got $23,500 out of an Arizona bank by sending an e-mail and a fake invoice for “Steve Knigge Consults” (really? I send an e-mail and a fake invoice to a bank, and they send me money? It’s that easy?). Knigge wired money to Yusof Mohammed Jamal, Awoyemi Omotunde, Mike Lai, and Umeano Jerry in Nigeria before the Arizona bank notified Wells Fargo they’d been robbed.
The court documents indicate no involvement of public dollars or abuse of Knigge’s official position with the state to commit these crimes. However, he appears to have been stupid enough to use his state e-mail for his plot. On September 29, 2015, the FBI and IRS interviewed him. Not long after that encounter, “the defendant attempted to delete numerous e-mails maintained on his computer with the South Dakota Department of Revenue, which included discussions of wiring money via Western Union and MoneyGram, wiring instructions to specific individuals, and e-mails sent by the defendant attempted to solicit money from others.” That attempt to destroy evidence earned Knigge the tampering charge.
The indictment says that Knigge “retired” from the South Dakota Department of Revenue shortly after the FBI/IRS interview. According to the state’s payroll database, Knigge was making $27.04 an hour when he left.
Knigge appears to have attempted to steal a total of $146,473. Only $42,200 was actually sent to his bank accounts, and at most (assuming the five men to whom he wired money are real dudes and not false names Knigge himself created on foreign accounts) only $3,500 ended up in Knigge’s pocket. For his trouble, Knigge could get 95 years and $1.5 million in fines.
Knigge’s Facebook page is a dreary, unoriginal mush of game updates and recycled memes, including occasional calls for drug testing welfare recipients, because, you know, people receiving checks from the government are probably up to no good.
Kompassionate Konservatism is a lot like a hangover. Give it time and the feeling will pass. (thanks to northierthanthou)
The Nigerian angle is really interesting. Is this a common ploy money fraudsters use in an attempt to cover their tracks?
Nick- Nigerian gangs are behind many of the scams one finds on the internet. Or should I say,scams find you.
That’s a puzzler to me, Nick. Thinking about what Mike said, could Knigge have gotten in debt to Nigerian gangs, and could those gangs have then pressured him to be their money launderer?
I wonder if Scott Kasley was someone real that actually worked with him in the investigation field, you know, someone who was also on the state’s payroll. I would like to go to his court and see this bully get owned by the same court system that he abused. One thing is for sure, this dummy cannot blame his crooked deals on drugs. He is just the opposite of that. At least a druggie would not have used his work computer to steal, he would have stolen the computer and hawked it. Life is funny sometimes. This joker is just more of the same kinds of problems we have been forced to put up with since the republican took over the state completely. One party rule is one party too many regardless of what party it is. Elect cabinet heads, the big marine is right.
mfi, with Nigerians usually they contact you through some mass e-mail attack and the idiots who click get the entire story of lost inheritance from some long lost relative, all you have to do is pay the taxes due and the riches are yours. Surely this guy, an auditor with the SD Revenue Department, is smart enough not to fall for that old as the internet scam.
I remember a scam from years ago where the fraudster sent a dry cleaning bill to restaurants for dry cleaning a suit and a note explaining that he had a lovely evening and great meal but sadly the waiter spilled an order on him and told him to send the bill and it would be covered. Usually the restaurant paid the <$20 or so bill. The guy sent the letters out to hundreds of restaurants and had a surprisingly high rate of payment. Eventually even his low dollar-high volume scam was discovered, but few places wanted to press charges because it would cost more to go to court than what any recovery was worth.
If these allegations of theft and fraud are true, and the Facebook post stereotyping and belittling those who apply for welfare is accurate, this guy epitomizes the hypocrisy we see so often in the “demonize the poor” crowd.
this guy should have been stupid tested. i’m sure he earned every bit of that $27.04 per hour working for our state, too. another overpaid state white collar worker in my opinion. look at the growth in size of state government in pierre since the early 80’s. good job small-government repubs.
hope this dufus gets drug-tested in the pen.
Nick-Pretty sure the restaurants didn’t want the negative publicity,either. :)
As the head auditor for the Department of Revenue, how do we know that he did not shake down the very people he was supposed to investigate? Maybe all of his works from the get go were tainted and all of the investigators were on the take as well. So if you were a contractor or someone else that had dealings and had a run in with ol Stevador, you may be able to get some payback regarding his whole shady dealings. 30 years is a long time to for a look back on all of his cases to make sure that maybe innocent victims were not improperly treated. Maybe a record could get expunged that would make a person eligible to vote again or hold a better job. This bitter man had a lot of control over the lives of many.
Pierre -the capitol bldg is getting to be a large, stinking Cafo with all them corrupt chickens coming home to roost in Wingnut, South Dakota.
Mercer summarizes/editorializes beautifully if demurrinly about EB5, then MCEC (I cynically hypothecate):
in 2009, TWO state employees conspired to steer administration of South Dakota’s program into the private sector.
(“Conspiracy” he says. I LIKE that idea. Sveen might be the third conspirator. Others exist, too.)
Benda, the secretary of tourism and state development (employed by THE state), signed a management contract for SDRC Inc., the private business started by Joop Bollen. Until then, Bollen ran EB-5 for Benda’s department (another state employee but grown-up Regents, Rounds and Governors’ offices cry–not my employee!).
Bollen left state job for SDRC Inc. (state incorporation as SDRC,Inc., and has been “lawyered-up” for some time. AG jackley seems utterly perplexed despite his own lawyers roles all along.)
(“state grant money” for EB5, mercer says below)
(federal grant money administered by the state for Indian Ed., ehh, what’s the difference, I ask? anyway…)
state grant money…to Northern Beef, in turn provided money to SDRC Inc., where Benda went to work after he was relieved of his Cabinet post in the transition from the Rounds administration to the Daugaard administration at the end of 2010. (rogue state employee fall-guy)
Jackley (running for governor against mickelson in 2018, mercer speculates) was preparing to take the grant matter to a grand jury.
(Benda kills himself after AG comes down on him, similar to Westerhuis after Ed. Sec. Schoop comes down on MCEC malfeasance. A frightening pattern evolved around Lake Andes and Platte. OMG!)
(After the less than transparent victim of unintended consequences,– the 2014 landslide state-wide Republican conspiracy/election of Rounds, Jackley and Daugaard– as many speculate…)
Mickelson sponsored self-dealing legislation in 2015 (HB1064). Prior to the 2015 legislation, appointed state board members were allowed to have business conflicts. (whaaaaat?)
The legislation didn’t close that window. (oh, well…shift to 2016, after Westerhuis centered murders, arson, suicide and infamous white pickup affair Jackley investigated and recently, apparently prayed over.)
(Enter legislator/governor -hopeful) Mickelson and others in HB 1214 roll more state boards into conflicts regulation, public disclosure regarding conflicts and official decisions.
Whether this would have applied regarding GEAR UP isn’t clear. (bob, is there anything clear involving republican government and corruption?)
The GEAR UP director, Stacy Phelps, served on the state Board of Education (appointed by______?) (an Indian education fall-guy? doh!! perhaps state employment contracts contain a “fall-guy” proviso. in return the state treats suspect employees w/kid gloves until careening tragedy intervenes somewhere, cutting off full investigation, prosecution and state accountability.)
the second half of HB 1214 applied to…disclosures and decisions regarding business conflicts for school board members and various other key officials for any education organization that receives funding. (the bill proposed) employees shall report suspicious activity to the employee’s immediate supervisor, the attorney general or the auditor general. (hey, i’ll bet this came up in 2014 EB5 fixative legislation, too)
Phelps received money from Mid-Central and from non-profit American Indian Institute for Innovation as the chief executive officer. (he apparently “back-dated a contract” whatever that means. his lawyer says otherwise, in duffy-try it in the press-tradition).
(On) Sept. 17, 2015, Schopp informed Mid-Central director Dan Guericke tha GEAR UP contract wouldn’t be renewed with Mid-Central. Guericke faces state criminal charges regarding contract documents that allegedly were falsified in the days and weeks before as a state audit (below) proceeded into its second year.
Mickelson and others said they don’t want to curtail citizen participation on state boards because expertise and perspective from the private sector is valuable. (Regents/GEOD apparent mantra. geeze, balancing fraud with cronyism is hard!)
SB 162, by Lt. Gov. Michels at the governor’s direction created a state Board of Internal Control, deeper monitoring of grants, conditions for grant recipients.
The attorney general said he wasn’t invited to participate. None of the three bills involved the attorney general.
when a legislator and an attorney general are raising hundreds of thousands of dollars toward their 2018 campaigns for the Republican nomination for governor (mercer observes, this happened. further, …)
In Mid-Central, the state audit was publicly available and news stories appeared in months before the tragedy. The audit work had been continuing, and GOAC had started its look, state government and Platte knew for more than a year before the killings that something was awry. (Mercer thinks Republicans) knowing that an audit finding would be read by someone in the state attorney general’s office would probably be a deterrent.
These three bills were big steps for state government regarding anti-corruption and public-integrity efforts. (baby steps? backwards?)
(this stuff isn’t that hard. one ethical investigator could pull it all together. go angela. go cory. go bob. come on woster, denise ross)
Mercer Blog 3.23.16
We have a state flag. We have a state motto. We have a state bird. So why not a state crime? I think South Dakota’s official state crime should be embezzlement…
Maybe we can put it on the license plates: South Dakota-The Embezzlement State.
So sad. The Wall Street Banksters wreck the economy, lose/steal billions, are rewarded with bailouts, while a little guy try’s playing the banksters for pennies like they played us and US economy for billions and ‘he’s a crook’. They are all crooks. And the government and the congress are in on it. And yes, South Dakota is the Embezzlement State – the kinder, gentler form of robbery.
Some casual Googling finds no apparent online connection between Steven Knigge and anyone named Scott Kasley. The money wired to this Kasley went to a DuPont Goodrich Federal Credit Union. That FCU has ten locations, all in and around Beaumont, Texas, just east of Houston.
The Vidor Vidorian reports the death of one Scott Dales Kasley, age 72, on December 20, 2015. I cannot find any other Scott Kasleys online.
Forgive an old man’s brain sticky with molasses, but how does this Knigge fellow tie into E-B5 and Mr. Phelps? I think you all have moved beyond me in your speculations and investigations.
its your fingers sticky w/molasses. since 2003 or earlier fraudulent state employees and enabling elected republicans and SDGOP cover-ups have consumed state progress with financial loss, lawsuits, election fraud and self dealing at all levels.
this guy is more like the flag thief so he is proudly prosecuted, after facts come to light exposing republican incompetence in state administration. distraction–drug of the breakfast club
You are making less sense than my gooey brain, Ms. leslie. Try to type it again, slower and using complete sentences with punctuation.
Rapid City Journal has a 2-part story on a Lead Contractor who was doing construction work for what turned out to be a major drug dealer. The drug dealer was a former narcotics cop. South Dakota of all places.
There was an Elizabeth Kasley who passed in Denton,Texas. Her hubby was a Scott Dales Kasley-died in 72 or 82 listed in Philadelphia obits.
Richard, how about:
South Dakota – Secret politics, Secret Scams
South Dakota – Land of low wage and dirty politics – proceed with caution
South Dakota- where no one knows where the buck stops.
So when can we begin to impeach Senator Rounds and most of the Republicans in power for Crimes against the citizens of South Dakota.
The Republicans are running a criminal organization from top to bottom, and our wonderful, citizens continue to elect these criminals.
I do not get it.
It is past time for South Dakota Republicans to understand that the Democratic party is not their enemy and is not going to take their hard earned money. Their own party is doing that too them.
Wake up Republicans and vote smart.
I’m thinking Nigerian immigrant gangs in Sanford City have gained a foot-hold in the left-wing of the republican party there and plan to take over state government in Pierre, then speedboat down to Lower Brule and Crow Creek and infiltrate tribal government.
Somewhere they heard there is plenty of money to be scammed.