Three Grifters, Off to Fleece the World...

(With apologies to "Moon River")

I've said more than once that South Dakota's favorite mainstream, non-sexual crime is embezzlement. From the small town bar to state government to federal grants, a lot of money disappears. Sometimes people die, although those are usually ruled suicides if the sum is large enough. So South Dakota Attorney General Marty Jackley ruled that EB-5's Richard Benda's death in a field - shot in the stomach with a shotgun - was a suicide.  And Gear Up!s Scott Westerhuis killed his family first, then set his house on fire, and then turned the gun on himself. (There was also a safe that apparently developed legs, trotted off like a pig, and has never been found...) I've written about these before.  (Benda and Westerhuis)

But over the last month, we've had three big cases of embezzlement that each involved someone in State Government who was somehow put in charge of monitoring their own finances. That's a pretty neat trick to pull off, and I'm surprised that more people haven't thought of it...

Embezzler #1:

Sixty-eight-year-old Lonna Carroll is charged with two felony counts of aggravated grand theft for embezzling $1.8 million from the South Dakota Department of Social Services over the last 13 years of her employment. Specifically, from foster care funds.

“The defendant was the employee making the request for assistance for a particular child. Once the request was made, she had also reached the position of being that supervisory approval,” Jackley said. “So she was the requesting person and the supervisory approval.”

Once the money was approved, Carroll intercepted the check, placed the funds in a bank then transferred the money to her own account in a different bank.

And that's how she eventually, after her retirement, was caught. "DSS converted to a different record-keeping system. A subsequent report filed by the state Department of Legislative Audit documented dozens of instances where checks from DSS were deposited at American Bank & Trust in Pierre, and later that same day cash was withdrawn from the accounts." So they looked into it and... 

The rest will be told in court.  (LINK)

Embezzlement #2:

Sandra O’Day worked for the South Dakota Department of Motor Vehicles in a supervisory capacity. She is suspected of creating fake car titles and using them to secure almost $400,000 in auto loans. Jackley says she created titles for campers without motors because they are not reported to the national registry.

“Once a false title was created, that title was taken to either a bank or credit union and a loan was taken out to somebody else, with the use of that as collateral. Once the loan was secured and the money, she then went and destroyed the fraudulent title.”

The DCI investigation led to the discovery of 13 forged car titles between 2016 and 2023. Since O’Day has passed away, no charges will be filed. According to Jackley, there is no evidence that anyone else was involved. KELOLAND News asked Jackley if the state could be on the hook to repay the loans to the banks and credit unions.

Because she was in a supervisory position, Jackley says O’Day could adjust VIN numbers, which allowed her to create the titles she would eventually destroy. Because of the statute of limitations, the DCI investigation only goes back to 2016. Jackley believes O’Day may have created even more fake titles as far back as 2011. (LINK)

We will probably never know the whole truth about this one - how many titles, how much money, because O'Day died in February, 2024, and Attorney General Marty Jackley has closed the case.  

Embezzler #3:

Lynne Hunsley, who served as a revenue supervisor in the Department of Revenue, was placed on administrative leave by department leadership within the last two weeks as she faces charges that she, too, falsified vehicle titles.

Interestingly enough, Hunsley worked for O'Day, and took over her position when O'Day retired in October, 2023. (I guess she learned from the best.)  This story broke only last week, so we're waiting on a lot more information.  

Meanwhile, A Blast From the Past:

A long time ago, I wrote about a place called MyDakotaAddress in Madison, SD, which was one of those online sites where permanent RVrs could become citizens in South Dakota (and other states with no income tax) through the simple means of spending the night at a South Dakota campground and then paying a regular monthly fee.  From my blogpost back in 2012:

This is only one of multiple little store-front operations that allow a person, in exchange for a yearly / monthly fee, to establish South Dakota residency and thus avoid paying state taxes in the state in which they actually live. They provide a SD mailing address, and help people obtain your new SD drivers license, SD vehicle registration and voters card.” They collect the mail and send it on, send on absentee ballots for voting, and basically allow a lot of people to “live” in South Dakota, thereby avoiding property taxes in their home state and perhaps avoiding other things as well. Who’s to say that the name they give is their real name?

 

Now, this is all fraudulent: It’s mail fraud, voter fraud, tax fraud… But, when I investigated it and brought it to the attention of all my state officials, I was told there was nothing illegal about it, and to contact them “when a crime had been committed.”  (The Wild West Continues)

Well, a crime was committed.  BIG crime.  Car theft.  In 2018:

A ring of savvy car thieves in New York exploited a bureaucratic weakness by registering many of their ripped-off Lamborghinis and Range Rovers in South Dakota, a state that lets people register out-of-state vehicles by mail and wasn’t thoroughly checking to see if they were stolen, the FBI said.

…In all, the group stole about $3.1 million worth of vehicles, according to the U.S. Attorney’s Office in Manhattan. The heists included the theft of five 2017 Nissan Titan pickups taken from a dealership in Tallahassee, Florida, and a Lamborghini Huracan stolen in Miami, according to court documents.

…According to the FBI, [alleged ringleader Marvin] Williams registered 43 vehicles with the South Dakota Division of Motor Vehicles using false documentation. At least 10 of those vehicles had been reported stolen, authorities said.

"I have reviewed records obtained from the SDDMV, which show that MARVIN WILLIAMS, the defendant, who resides in Connecticut, has registered approximately forty-three vehicles in South Dakota, with the SDDMV, on behalf of himself and others, and has submitted false documentation, including false titles with invalid VINs, to the SDDMV to do so. In contrast to other states, prior to this investigation the SDDMV conducted fewer or no checks to confirm authenticity of VINs and lawful ownership in connection with registration of vehicles" [FBI Special Agent Kevin M. Gonyo, Complaint, USA v. Marvin Williams et al., U.S. Southern District Court of New York, 2018.11.06, p. 6].  (LINK)

Now I can't help but look at Sandra O'Day's career in forged car titles and wonder... was she involved?  Did she copy-cat?  Will we ever find out?  

And also, will anyone in our Legislature consider making it illegal for someone to both purchase and approve their own purchases?  One would hope so:  However, in Davison County, they're talking about merging the Auditor's and Treasurer's Offices into one.  Great idea! Save money!  

But Chief Deputy Auditor for Davison County James Matthews is concerned about the removal of checks and balances that would come if roles combine. “In our current status quo system, we have an elected treasurer and an elected auditor and our offices take each other’s work at the end of the month and are able to balance all the accounts to check each thing to the penny,” Matthews said. “With one office, you eliminate that checking of balance of both independent offices, working together to ensure that all the finances are accounted for and to prevent fraud.” (LINK)

Bingo.  

South Dakota, where we talk like Mayberry and act like Goodfellas...