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of instances where checks from DSS were deposited at American Bank & Trust in Pierre, and later that same day cash was withdrawn from the accounts."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...  

  

 

Things Fall Apart

[Sherlock Holmes said,] “It is my belief, Watson, founded upon my experience, that the lowest and vilest alleys in London do not present a more dreadful record of sin than does the smiling and beautiful countryside.”

“You horrify me!”

“But the reason is very obvious. The pressure of public opinion can do in the town what the law cannot accomplish. There is no lane so vile that the scream of a tortured child, or the thud of a drunkard’s blow, does not beget sympathy and indignation among the neighbours, and then the whole machinery of justice is ever so close that a word of complaint can set it going, and there is but a step between the crime and the dock. But look at these lonely houses, each in its own fields, filled for the most part with poor ignorant folk who know little of the law. Think of the deeds of hellish cruelty, the hidden wickedness which may go on, year in, year out, in such places, and none the wiser."

— Arthur Conan Doyle, The Adventure of the Copper Beeches

Living in South Dakota, and most of that time in a small town, I agree with Holmes' assessment 100%.  

I've related in many a blog the ins and outs of various government corruption and malfeasance, from EB-5 to Gear Up! to the death of Joe Boever, and more.

I've also sat in a courtroom and watched as a grandfather, convicted of molesting all four of his grandchildren, was given a slap on the wrist from a judge because the man "had an unblemished record."  

And then there's the petty stuff: small towns where "everyone takes care of each other", so they don't have to enforce the rules.  With predictable results:  people don't shovel their sidewalks unless they feel like it, a noted person (with money) was allowed to turn numerous private properties into private junkyards, and the memorable time when one man threatened to shoot anyone that set foot on his property.  And then complained because the volunteer fire department watched his house burn down. 

BTW, there's no feud like a small town feud, unless it's a small town church feud.

Back on January 13, 2019, in my post "What We're Best at Being Bad At", I said that South Dakota was really good at embezzlement. And we are. To quote myself:

"Besides grifting on the state level, there's also one heck of a lot of small potatoes embezzlement here in South Dakota, much of it fueled by gambling addiction and/or medical bills. $500 from the local VFW; $1,500 from a doctor's office; $2,500 from a nursing home. Interestingly, other than the public humiliation, the punishment is usually a slap on the wrist: the main penalty is to pay the money back and do community service. Rarely is there any jail time. Perhaps that's why it's so common…
But sometimes it's bigger: Just recently, up in Kingsbury County a family-run grain elevator has gone bankrupt because the family was hedging commodities and lost as much as $15 million of other people's money." (HERE)

At the time I didn't go into details, because so much of it was "gossip".  Well, it's now two years later, and "Jared Steffensen of the Arlington, S.D., area, pleaded guilty to theft by deception in his H&I Grain Inc. business, at a June 29, 2021, hearing at the Beadle County, S.D, courthouse at Huron. He speculated on grain trades, and then failed to pay millions to farmers. He and his wife, Tami, could face five years in the state penitentiary. His mother, JoAnn also pleaded guilty to a felony of failing to inform state regulators that her company was failing financially." (AG Week)

Former H&I Grain Inc. site at Hetland, S.D, original location for a family business that ran into legal trouble when Jared Steffensen of Arlington, S.D, accelerated speculation in grain trades, costing ~32 farmers and companies millions of dollars.
Photo taken May 6, 2019, Hetland, S.D. Mikkel Pates © Agweek

Citing“criminal mentality” (for one thing, the scam went on for months) and “lack of remorse,” Circuit Judge Kent A. Shelton sentenced Jared and Tami Steffensen each to terms of five years in state prisons and made them liable for restitution of $4,966,491.80 to farmers, as well as other costs. And had them marched out of the courtroom, in handcuffs, back to jail. (Ag Week)

But the neighbors know, in the words of Greg Albrecht, whose family lost more than a million dollars, "We're never going to see nothing out of it." And they probably won't.

And that's not the worst scam:

On November 4, 2021, Robert "Bob" Blom, a feedlot operator in Corsica, South Dakota (pop. 592) was sentenced to 91 months in prison after pleading guilty to a Ponzi scheme. Basically, he ran a custom cattle feeding operation in which he resold cattle he didn't have in inventory to investors, falsified invoices and used the money to pay back old investors.

He owes $24,282,865.94 to people he conned – life-long neighbors, who definitely feel that he's getting way too little for his crimes. "Was there any plea bargaining for me?" asked Rod Myer, a cattle feeder that worked with Blom for 14 years and was a victim in the case. "I hear a lot in the courtroom today on how Bob felt. Well, how do you think I felt?… There goes my life savings." (Argus)

That's TWO multi-million dollar peculations occurring in TWO rural counties in South Dakota.

Now here's the deal: if you live in Corsica, SD (pop. 592), in Douglas County (pop. 2,835), or if you live in Hetland, SD (pop. 46) in Kingsbury County (pop. 5,187), you know just about everyone in the entire county.  You went to school with them, to church with them, etc. You've known them all your lives.  You trust them. "A man's word is his bond" is a common saying.  A handshake could seal major contracts.  And suddenly, one family in each of these counties, in absolute cold-blood, screwed everyone - life-long friends and neighbors – out of their life savings. 

It's not even the money, as much as that hurts. As Jeff Hampton, a friend of Blom’s for over 50 years, said, "Bob should never see the light of freedom again — those are hard words coming from a friend.” Then he turned to Blom. “You’ve destroyed the trustworthiness of a man’s word.” (Ag Week)  And he only got 7.5 years in prison.  

Let's put it in perspective:

In South Dakota, you get drunk and kill someone in a bar-brawl, you can - and many do - get life without parole for 1st Degree Manslaughter.  If you hit and kill someone while driving drunk, at least 10 years.  (Does not apply to state officials driving late at night on rural roads who run into deer with glasses. They get misdemeanors. And complain about that.)  One recent case involved 4 young men who were all charged in the shooting death of a man named Jordan LeBeau. The actual shooter got 40 years, but Kevin Rice got 60 years - not for shooting the victim - but for not stopping the shooting.  (Argus)  

Meanwhile, financial crimes get a slap on the wrist. 5 years. 7.5 years.  You have to be Bernie Madoff to get a life sentence.  Otherwise...  Well, all those people shouldn't have trusted them, right?  We'll set up a payment plan.  And - sort of related - Smithfield Foods in Sioux Falls recently finally admitted to not doing enough to stop Covid back in the beginning, when 1,294 workers got Covid and 4 died - and paid a fine of $13,000.  This is around $10 a survivor OR $3,250 per death, which tells you how much a meat-packing plant worker's life is worth.  

Watch your backs, folks. There is no Eden, and even in Eden there was a snake.  Why not in South Dakota, where we talk like Mayberry, and act like Goodfellas?  God, I wish I was joking.

Of Safes and Smoke

by Eve Fisher

Do you remember the South Dakota GEAR UP! scandal?  The one that got started when, early in the morning of September 17, 2015, a fire destroyed the home of Scott and Nicole Westerhuis and their four children in Platte, South Dakota?  And they were all later found to be shot to death?

Quick Note:  (GEAR UP! is a federal grant program to get financial assistance to low-income students; here in SD it's primary aim was supposed to be helping Native American students.)  

SD AG Marty Jackley

Now, my regular readers may remember that South Dakota Attorney General Marty Jackley determined that Scott Westerhuis shot his wife and children, torched the house, and then shot himself, all because he was about to be caught for embezzling enough funds to build a $1.3 million rural home, a $900,000 gym complete with basketball court, etc., etc., etc., on an official combined salary (his and his wife's) from Mid Central Educational Co-Op of $130,000.  Later, it turned out that the Westerhuises had set up a number of shell organizations, and given themselves hefty salaries from them all.

Well, I'm happy to announce that the General Audit of Mid Central and GEAR UP! has finally been released and it shows:

(1) Scott and Nicole Westerhuis took nearly $8 million out of Mid Central's bank account without authorization to cover the salaries of their non-profit organizations. Supposedly most of that money was returned to Mid Central (how, when, where?), but $1.4 million was still missing at the time of the Westerhuis family's deaths.

(2) The Mid Central Board and its director, Dan Guericke, didn't have enough oversight and never addressed the risks created by Scott and Nicole Westerhuis having roles in the non-profits they set up to take the GEAR UP! grant money.

(3) Guericke didn't get approval by the board for 17 contracts and a number of payments made without contracts with the Westerhuises.

Naturally, the blame game has begun:

• Mid Central's board is blaming the South Dakota Department of Education ("lead partner" in the GEAR UP! grant and responsible for ensuring the project was carried out in accordance to federal rules and regulations).  
• The SD DOE says it did its job of conducting reviews of grant expenses and tightened up its controls when it began noticing issues in 2014, which is why it cancelled its contract with Mid Central right before the Westerhuis tragedy.  
• The Mid Central board's responded that, "no amount of reasonable oversight would have detected the complex scheme of fraudulent and illegal activities conducted by Scott and Nicole Westerhuis."  (Angela Kennecke, KELO TV)  

• NOTE:  I once put together five years of an organization's accounts from a checking account register.  You can figure out a lot if you just follow the money...

• Also, Cory's blog Dakota Free Press has all the facts and figures that we have so far, and all the excuses piled up so far.

So, June 30, 2017, Mid Central will shut down. 12 of its 13 members have formed Core Educational Cooperative.  The same staff of Mid Central (those who are not going to trial) are now going to work for Core (at least half of them had to have conflict-of-interest waivers to work for Mid Central, and will now have to have conflict-of-interest waivers to be able to work for Core); the Mid Central Board is liquidating their assets (even though $1.4 million in tax-payer money is still owed to our long-suffering public).  Please see Cory Heidelberger's article at Dakota Free Press for a fuller experience of how deep it's getting piled.  Again...

Meanwhile, no one's come forward yet to untangle the following mysteries:
(1) Who called Nicole's cell phone in the middle of the night, right before the fire?
(2) Why did Mid Central Educational Co-op, which owned the Westerhuis cell phones, cancel them and wipe the records the next morning, before the ashes from the arson had even cooled?
(3) What did Mid Central Educational Co-op Director Dan Guericke talk about with Scott Westerhuis for an hour on the evening before the tragedy?  (Guericke told the board the two really didn't talk about much at all.)
(4) What happened to the Westerhuis safe, which trotted out of the house like a trained pig right before the house was torched?

Yes, there's going to be a trial of 3 Mid Central employees, including Director Guericke.  Maybe the questions will be answered then...  But I'm not holding my breath.  Will keep you posted.

The other big news of the week hearkens back to last year, when the Flandreau Santee Sioux Tribe reversed course on opening America's first Tribal Marijuana Coffee Shop, and burned the whole crop in November.  (They had been warned that they were going to be raided by federal officials.)  AG Jackley was suspicious that they hadn't burned it all, and talked about charges.  And he did.  He charged Colorado marijuana industry consultants Eric Hagen and Jonathan Hunt for helping the tribe set up their grow room, etc.  (BTW, State AGs can’t prosecute non-Indians for crimes on reservations, but Jackley argued that his office had jurisdiction to prosecute victimless crimes committed by non-Indians.) Hunt rolled over and pled guilty but Hagen went to trial: and was acquitted by a jury. (Hagen testified that he was simply a consultant with experience in the industry who had been hired by the tribe, and apparently the jury agreed with him.) Marty Jackley was restrained, saying that he respected the jury's verdict.  (See the Argus Leader article for more details.)

Many people believe that the reason Jackley pursued this lawsuit was because he and current SD Rep. Kristi Noem (R) are going to duke it out for the South Dakota Governor's Office next year, and he's trying to get out front on the law & order issue. (Most of us think taxes and health care would be more salient...) But, as we move into yet another election year, the questions pile up:
Will GEAR UP! come up?
Will crop insurance?
Will marijuana?
Will riding horses?
Will let you know.

Meanwhile, a friend just told me that a forrmer public works director (no names were named) said that South Dakota doesn't really need federal money for infrastructure, because driving on bumpy roads isn't all that much of an inconvenience. My friend pointed out that tourists might disagree & he said tourism doesn't impact the state economy that much...

Crazy Horse Memorial - Photo by TBennert on Wikipedia

Mount Rushmore - Wikipedia

Badlands National Park - Wikipedia

The Needles - photo courtesy of
Doug Knuth - https://www.flickr.com/photos/dknuth/7677770944/
Wikipedia

Bear Butte - photo courtesy of
Jsoo1, as English Wikipedia image: en:Image:Bearbutte4.jpg

Sturgis motorcycle rally - Photo courtesy of
Cumulus Clouds, Wikipedia

Are our public officials TRYING to run our economy into the ground, or are they just stupid?

More later, from South Dakota, where we talk like Mayberry, act like Goodfellas, and the crazy just keeps on coming.

 

More Updates From South Dakota

One of the fun things about having moved around a lot is that you learn that most places look a whole lot alike any more, from the strip malls to gas stations, from fast-food chains to housing developments.  And don't even get me started on the "industrial parks", where large metal sheds are the new factories (no windows, two doors, completely anonymous).  Even Josiah Bounderby would think they were a little too utilitarian.
On the other hand, the other fun thing you learn is that, underneath all that sameness, there are real differences.

One thing that puzzled me when I first moved up here, was why there were so many cornfields standing, unharvested, well into November, December, January, February...  I mean, there's brown corn, with cobs, with snow.  So I asked about that:  "Was there some sort of blight?" And was told that the corn was freeze-drying in the fields, to save the cost of corn dryers.  Who knew?  I'd been living in the South for the last 17 years, where they harvest at harvest time, i.e., the fall, because if they leave the corn in the field, it'll rot with all the rain.  Up here...  well, we're colder than that.

Here's another puzzler:

There's lots of signs here in South Dakota for "Limousin Service". As a newcomer, I had two questions:

(1) why were there so many limousine services in rural South Dakota?
(2) why didn't they spell it right?

Later I learned that a Limousin (outside of Sioux Falls) is a cow. French origin, from the Limousin, but all over the place up here, along with Angus, Shorthorn, Simmenthal, etc.   And, of course, Limousin Service is about breeding.  (Which sometimes happens in limousines, too, but we won't get into that.)

BTW, this is NOT a misspelling, but deliberate:



There are more than one of these signs along I-29 between Sioux Falls and Mitchell.  Dick knows how to make you look.  Betcha he gets a lot of calls, too.

BTW, this is why I regularly put characters asking stupid questions into my stories.  God knows I've done it often enough.

Thankfully, there are other ways to find out what's going on in a new area than running around asking crazy questions.  For one thing, find out who's the biggest gossip in town and park yourself next to him at the Norseman's Bar or her down at the Laskin Cafe.

Another way is to read the local paper.  And not just the local daily paper, but the local weekly paper, which services the whole county.  We have one, called "The Peach".  If you need field irrigation wells, farm & home wells, high capacity pumps; if you want to buy a limousin 2 year old bull or an Angus yearling; if you need retrenching or a ride to Branson to see Daniel O'Donnell; or any sort of job in the healthcare, farming, or hog confinement industry, the Peach is the place to go.

Did I mention barn straightening?  Seed cleaning?  Bean stubble baling?

Also pork loin feeds, and church suppers, all of which are other places where you can go and get fed while catching up on the news/gossip/weather report.

And then there are the Locals, where we find out what to do with our spare time:

• Dist. 8 Conservatives Luncheon
• Laskin Duplicate Bridge
• Arts Council
• Alcoholics Anonymous 
• Sr. Citizens Dance (hugely popular; if you're a guy who loves to dance, you will not sit down for longer than it takes to have a cup of coffee or a highball to pep you up for the next dance.)
• Christian Motorcyclists Association
• VFW Auxiliary Sunday Brunch - every Sunday, great pancakes, come on down!
• The Country Swingers (more dancing; get your mind out of the gutter) 

Now granted, it's not the Agony Column that Sherlock Holmes read every day, but things slip in.

Like what happened to the person who posted "Acres of good used hog equipment for sale"?  What happened to THAT hog containment operation?  And why does s/he say, "Save this ad"?

Or why is someone "looking for used mobile homes, 1995 or older, will pay CASH."  Do they breed? Are they refurbished and sold as new?  Or are they being shipped up to the Bakken for the man-camps?

Or the sale of "Positive Rain Gutters".  (Watch out for negative rain gutters, they will leak and you.)

And there are auctions galore, of course.  These are important, not only because you can bid on everything from TOOLS OF ALL KINDS (and they ain't kidding!) to Antiques, Trucks, Household Goods, Implements, Stationary Engines, Parts & Pieces, and the land itself.  Auctions are where people gather.  They last all day; food (or at least coffee) is often served; and people stand around and catch up on everything, from who's there and who isn't.

And speaking of auctions, we had a humdinger back in September.  You remember the Gear Up! scandal, where, early in the morning of September 17, 2015, a fire destroyed the home of Scott and Nicole Westerhuis and their four children in Platte, South Dakota.  Our Attorney General Marty Jackley determined that Scott Westerhuis shot his entire family, torched the house, and then shot himself, all because he was about to be caught for embezzling enough funds - and no one still knows how much - to build a $1.3 million rural home, a $900,000 gym complete with basketball court, etc., etc., etc., on a combined salary of $130,000.

Well, look to your right, folks.  Yes, they auctioned off what stuff survived the fire that night.  For a detailed look at what was on auction, read Cory Heidelberger's blog HERE.

As you might expect, the auction was a major topic of discussion around town.  Many of us agreed that we would not be anxious to have any item from that property because we are almost all superstitious, and feel like the TVs might go on and off by themselves, or perhaps the desk roller chairs might start swiveling around in the middle of the night, like at, say 2:57 AM when someone used the Westerhuis landline to call Nicole Westerhuis' cell phone...

The land itself was sold at auction to the Platte Area Ministerial Association, who plan to open an interdenominational Christian camp there.  Unfortunately, they only had the $37,000 down payment and are trying to raise the rest of the $370,000 bid.  They've set up a GoFundMe page, which hopefully will work.  (Although I can't but wonder if an exorcism might also help...)

And where did the funds that were raised go?  To pay for the funerals; compensation for estate representatives and attorneys; a dozen credit card companies, banks, and workers.  Meanwhile, Gear Up! will not be reimbursed nor, apparently, the State of South Dakota.

And speaking of Gear Up - Mid Central Educational Co-op Director Dan Guericke is accused of backdating contracts to avoid a government audit, plus sighing at least 17 illegally secret contracts on behalf of Mid Central worth $3.8 million. Where, oh, where did the money go? (see all of Angela Kennecke's report HERE.

Speaking of Guericke and Westerhuis, "Guericke spent more than an hour on the phone with Scott Westerhuis the evening before the tragedy and when the board questioned him about what was said, sources tell me that Guericke told them the two really didn't talk about much at all."  Mm-hmm.

Did I mention that they STILL haven't found Scott Westerhuis safe?

Ah, South Dakota, where we talk like Mayberry, act like Goodfellas, and the crazy just keeps on coming.

 

Janice Law's "Homeward Dove"

by Eve Fisher

Have you ever looked around and realized you're in a dead-end job, in a dead-end town, working your butt off for just enough to keep you in rent and groceries?  Too much drinking, too much junk food, too much wasted time.  A memory of something better - like that girl back in high school - but right now you've settled.  Oh, how you've settled.  The only good thing in your life is fishing, drinking, and the occasional roll in the hay with a woman who's also settled, and doesn't really care...

And it ticks you off, down deep. It should be better than this.  There should at least be a future, right? Maybe a vacation that doesn't involve Motel 6 or a friend's busted out old camper? A better job? A home and family?

And if you can't get that, why should you play it straight?  It's a mug's game, and you don't want to be just another loser.  So you cut corners, do some dicey stuff, make a little money on the side, but you've got your ass covered.  Everything's fine.

And then in she walks.  Not Lana Turner from The Postman Always Rings Twice.  The supervisor from hell, with a clipboard, an attitude, and a taste for money.  The kind of person who knows who's screwing the company, because that's her plan, too.  And she goes straight for your throat.  Pay up, or get fired.  And keep paying, paying, paying...

Welcome to the first 14 pages of Janice Law's new novel, Homeward Dove.  (Available here at Amazon, in paperback and on Kindle.)

Our dead-ender is Jeff Woodbine, our supervisor from hell is Michelle, and the high school dream girl is Jess.

So, where do you think this is going to go?  Not where you think.  Like a Coen Brothers' movie, this has twists and turns, dark humor and black deeds, that go places that you don't expect, but when they come, you know they're absolutely right.

Michelle is like all blackmailers, just stupid enough so that her greed makes her feel invincible.  She keeps pushing, and pushing, and pushing for more money.  Jeff is at the end of his rope.  But on the opening day of trout season, when a hungover Jeff climbs out of bed with his f-buddy, Lynn, and goes down to the river to clear his head, who does he find but Michelle, wheeling a toddler down the path.

Well, they're going to get into a fight, right?  Yes.

He's going to kill her, right?  Inadvertently, yes.

The only witness?  A toddler, who can't even speak...

And when he gets back home, Lynn is still asleep, nobody's noticed, everything's fine.

So why does he feel so sick?  And what happens when the police show up?  Thank God - in Jeff's world - for Hurricane Andrew, which gives him a chance to get out of town without seeming like he's running away.  He works hard, cleans up his act, makes some money, lives with it all.

Months later, he's back, to a new job.  And he runs into Jess, the woman he's always wanted, who cried in his arms the night before her marriage to a man who died a few years later, a military hero. She's beautiful, sympathetic, loving; and Leon, her son, is the toddler in the stroller who saw Jeff kill Michelle.

So, where do you think this is going to go?  Not where you think.

There are twists and turns. Conscience and cops.  A fire that damn near destroys everything.  A story that Jeff's grandfather has shared with no one, "Though you're maybe the one to tell."  And when he does, it comes with a warning:  "See you be careful and don't get into [a business] that's as high priced."  But the warning comes too late for Jeff.  What he needs is to know what to do next.

Homeward Dove is like a Coen brothers' or an Alfred Hitchcock movie, where ordinary people in ordinary lives get bad breaks, make bad choices, and do bad things.  Sometimes very bad things. And then try to break free, as frantic as a fly in a spider's web.

You can't help but root for Jeff.  But what's right?  What's fair?  What should happen?  What does?

"Dance me to your beauty with a burning violin.
Dance me through the panic 'til I'm gathered safely in.
Lift me like an olive branch and be my homeward dove...
Dance me to the end of love;
Dance me to the end of love."       Dance me to the end of love - Leonard Cohen

If Only We Had LAWS Against This Stuff...

"If only we had LAWS against this stuff..." and other crazy statements:
Okay, a few reminders just to catch everyone up.

Joop Bollen and then-Governor,
current SD Senator, Mike Rounds,
in happier days

• Back in 2009, Joop Bollen was appointed to run EB-5 – which was a federal program designed to trade green cards to foreign investors for $500,000 a whack - by our former governor, current Senator Mike Rounds, who, when questioned recently about all of this, said, "The state of South Dakota would use different federal programs on a regular basis and you always assume that if the federal program is in place that they have a control process in place. We’re finding in some cases that that is not the case " (Mike Rounds interview).  Like when you put Joop Bollen in charge of that federal program, allowed him to privatize it in SDRC Inc., and told everyone what a great job he was doing?  (I swear to God, you can't make this stuff up... Sadly...)  

• There's still as much as $120 million missing from the EB-5 program. 

• For two years, the only person held responsible for any missing funds was Richard Benda, who according to our fearless AG shot himself in the stomach with a shotgun in a field because he'd embezzled $500,000.  

AND NOW FOR THE LATEST !!!  HEADLINE NEWS !!!

First of all, our own Attorney General, Marty ("I'm going to be running for governor in 2018, so I need to get something on paper") Jackley has FINALLY indicted Joop Bollen on five felony counts of violating SDCL 44-1-2, “unauthorized disposal of personal property subject to security interest.” In other words, Bollen used EB-5 money, transferred to his own private corporation, SDRC Inc., for his own personal purchases.   $300,000 here, $96,000 there, to a total of about $1.2 million. He sent some to Pyush Patel of Griffin, Georgia (who owns gas stations and has been participating in Bollen's corporation creationism since 2005), some Bollen just pocketed, and some (and this is my favorite part) Bollen spent on Egyptian artifacts from Christie's and the Harer Family Trust.

NOTE: Bollen, through his lawyers, claims he's being scapegoated.  Mr. Bollen is also free on an unsecured $2,500 bond. (That should make you spit your coffee out in shock:  let's face facts, you'd have to post a lot more money than that if you'd just robbed a casino and gotten only $200 bucks.)

NOTE WITH FACEPALM:  Nor has the Dutch born and raised Bollen been asked to surrender his passport.  Jackley said that “at this point” he “did not have concern” about the passport, “as long as we’re made aware of certain travel,” since Bollen has “significant ties financially to this community.” (Bollen Initial Appearance - dakotafreepress.com - once again, thanks Cory Heidelberger for GREAT coverage!)  Again, you'd have a rougher time of it if you'd robbed a casino and gotten only $200 bucks...

And here's the best part: Right now our fearless AG Jackley - who, as I said, for 2 years has blamed Richard Benda for any and all EB-5 problems - is now blaming the whole mess on (drum roll, please!) a lack of tough laws making conflict of interest a felony! Personally, I would have thought that our laws making embezzlement, fraud, etc., felonies would have been enough, but apparently not.  We need more.  So it's really all the South Dakota legislature's fault...

Oh, and one quick note about the Gear Up! scandal (6 people dead and counting) and the missing Westerhuis safe (The Chinese Are Coming). “I don’t know where that safe is at,” Jackley said. “I don’t know if it burned in the fire or if Scott Westerhuis took it out and threw it in the Missouri River.” (Jackley Conspiracy Theories, Argus Leader)  Feel free to insert obvious questions here:

 __________________________________________________________________________

Marty Jackley

Meanwhile, Mr. Jackley, having apparently solved everything about EB-5 and Gear Up! (except that pesky $118.5 million in EB-5 money, the pesky $4 million in Gear Up! money, and the pesky missing Westerhuis safe), is far more interested in investigating the destruction of the Flandreau Santee Sioux Tribe's marijuana crop in November (some of the burning was shown on television) after the tribe suspended plans to legalize marijuana on its reservation.

"I don’t think for a minute that they destroyed $1 million worth of marijuana. I don’t know where that went and it’s an open case. We never shut that case," Jackley said in an interview with Argus Leader Media. “We never got an opportunity to check what was destroyed." (Up in Smoke?)  

Priorities, priorities...

And now, repeat after me: "Life is always going to be stranger than fiction, because fiction has to be convincing, and life doesn't." Author Neil Gaiman.

Will keep you posted, from South Dakota, where we talk like Mayberry, act like Goodfellas, and the crazy just keeps on coming.

 

Barney Got a Gun

by Eve Fisher

I hope everyone had a Happy Easter, Good Passover, and other appropriate holiday.  Up here, one of our Easter Eggs held indictments - at last - for three in one of our South Dakota scandals - Gear Up!

(Wouldn't you know it, the cheap one, only a few million missing, whereas EB-5, with $120 million missing taxpayer dollars, is still blamed on the guy who supposedly shot himself in the stomach in a field while hunting...)  

But let us rejoice in small favors.  What happened was that our own Attorney General, Marty ("I'm going to be running for governor in 2018, so I need to get something on paper") Jackley held a press conference and announced that three, count 'em THREE people were responsible for aiding and abetting Scott and Nicole Westerhuis in their embezzlement and fraud.

Quick reprise:  Early in the morning of September 17, 2015, a fire destroyed the home of Scott and Nicole Westerhuis and their four children in Platte, South Dakota.  It was later declared ed by AG Marty Jackley that Scott Westerhuis shot his entire family, torched the house, and then shot himself. There is still the ongoing mystery of who called Nicole's cell phone in the middle of the night, right before the fire, and what happened to the safe that apparently got up on its hind legs and trotted out of the house before the carnage.

36705 279th Street, Platte, SD.
screen cap from Google Maps,
2015.09.22.

Further reprise:  Scott Westerhuis was the business manager of MCEC, the Mid Central Educational Cooperative, which is, among other things, a hub for distributing federal grand monies to other non-profit organizations, including Gear Up.  Nicole also worked there.  Scott Westerhuis set up as many as 7 non-profit corporations related to Indian education, including - but not limited to! -  the American Indian Institute for Innovation, a/ka AIII.  Scott Westerhuis was incorporator of all of these, CFO of some, including AIII, and his wife Nicole was business manager of at least some of them.  And the Westerhuis family lived on a $1.3 million rural Platte property that included a 7,600 square foot house, a $900,000 gym complete with basketball court, weight-lifting area, and computers, and a loft with a meeting room, rooms for guests, and a kitchen.  This was on an official combined MCEC salary of $130,549.82.

Okay, back to the news conference!  On March 16, 2016, Marty Jackley announced that he filed charges against and arrested: 

Daniel Mark Guericke, MCEC Executive: 2 counts of falsification of evidence, class 6 felony, punishable by up to 2 years imprisonment in the state penitentiary and/or $4,000 fine, 4 counts of conspiracy to offer forged or fraudulent evidence, class 5 felony, punishable as a Class 6 felony, with a maximum sentence of 2 years imprisonment and/or $4,000 fine.  Full transcript of complaint here: (PDF of Complaint filed)

Stephanie A. Hubers, Former MCEC interim business manager: 1 count of grand theft, class 4 felony, punishable by up to 10 years in the state penitentiary and/or $20,000 fine, 2 counts of grand theft by deception, class 4 felony, punishable by up to 10 years in the state penitentiary and/or $20,000 fine, 3 alternative counts of receiving stolen property, class 4 felony, punishable by up to 10 years in the state penitentiary and/or $20,000 fine.

Stacy Lee Phelps, Former AIII (see above)/GEAR UP operator: 2 counts of falsification of evidence, class 6 felony, punishable by up to 2 years imprisonment and/or $4,000 fine, 2 counts of conspiracy to offer forged or fraudulent evidence, class 5 felony, punishable as a Class 6 felony, with a maximum sentence of 2 years imprisonment and/or $4,000 fine.

NOTE:  Mr. Phelps' lawyer is mounting a vigorous defense, based on the idea that Mr. Phelps is a scapegoat.  Perhaps he is.  (If so, he should be thanking his lucky stars that he isn't lying in a field somewhere...)  

Among other things, Guericke, Phelps, the Westerhuises and “other unknown co-conspirators" were all accused of falsifying and backdating contracts, including those of 

• Dr. Rick Melmer, the Dean of Education of the University of South Dakota, who (memorably) couldn't remember nine $1,000 in payments live on South Dakota television, and 
• Keith Moore, Governor Mike Rounds' director of Indian education. 

So far, neither Dr. Melmer (who as Secretary of Education under Governor Mike Rounds, moved supervision of Gear Up from the DOE in Pierre to MCEC in Platte), nor Mr. Moore (who also received a good chunk of change), nor former Mid-Central board chairman Lloyd Persson (who actually signed the bogus contracts) have been indicted, and Jackley has indicated that they won't be.

Nor has anyone asked Secretary of Education Melody Schopp to resign, even though she let MCEC continue their interesting approach to funding for three years after she noticed that something smelled a little funny.  Apparently, they are still looking into at least two other MCEC staffers who (according to Hubers) blackmailed some money out of Westerhuis.  Cory Heidelberger suggests that Mr. Jackley look into the board members of the American Indian Institute for Innovation, which was, apparently, the hub of moving stolen money around.  And no one has mentioned my favorite, Dr. Joseph Graves, Mitchell, SD School Superintendent, who received money from the MCEC for teaching "Teaching American History" in a state that has made it optional.  

Also, we're down to only $1 million missing, instead of $14 million, but hey, it's still better than the EB-5 mess.  Right?  

Angela Kennecke, KELO-TV

Well, right now, we're all waiting for the other shoe to drop.

"Sources who have first-hand knowledge within the Department of Education tell KELO-LAND News there were questionable expenses involving GEAR UP grant money as early as 2006 that were brought to the attention of department officials."  Angela Kennecke, 3/23/16

What this means, in South Dakota speak, where no one ever admits anything is actually WRONG, is that there's something else coming.  Possibilities:

(1) People ('sources') know that more hell is about to break loose and are getting ready to get out from under it.

(2) It's possible that someone ('sources') in the higher-ups is authorizing a leak, which is the first step to a flood.

(3) They found the safe.  

Okay, the last one's HIGHLY unlikely.  And if they do find it, it'll probably just be full of pork.

And there's the recent news that "There have been several million dollars diverted out of school funding at Lower Brule [reservation] and as a result they had to go into restructuring which is a federal requirement when you have really low school performance. And so they hired AIII Stacey Phelps, which at the time was the head of AIII, and Scott Westerhuis was the COO. So they (Lower Brule) brought in AIII to manage Lower Brule schools and that had been going on for about two years."  (Thanks again, Cory Heidelberger and the Dakota Free Press!)  And people wonder why the Reservations up here are still in a world of financial hurt...

Anyway, that's the latest update from South Dakota, where we talk like Mayberry, act like Goodfellas, and the crazy just keeps on coming.

 

The Chinese Are Coming!

A while back I wrote a column called "A Little Light Corruption"  about how South Dakota looks like Mayberry and acts like Goodfellas.  The body count is still only at seven (thank God), but the money is getting weirder by the minute.
For one thing, 35 Chinese investors are suing the State of South Dakota for $18,550,000, claiming they got ripped off in the EB-5 (green cards for a $500,000 investment) program.

And Joop Bollen (a Dutch foreign national), who somehow was allowed by our own then-Governor Mike Rounds (currently our US Senator) and our current Attorney General Marty Jackley, to privatize EB-5 and turn it over to himself via his own corporation (SDRC, Inc.) is now suing the State for defamation of character.

And our AG, instead of issuing warrants, is asking the court to freeze Joop's assets which are, in one bank account, around a million dollars.

NOTE:  Remember, originally, AG Jackley determined that the only "misappropriated" funds from EB-5 was the $500,000 that Richard Benda supposedly stole before supposedly killing himself in a field.  Apparently things have changed.  Although Marty Jackley is keeping as quiet as a tomb.

Joop Bollen and then-Governor,
current SD Senator, Mike Rounds

SECOND NOTE:  Mr. Bollen has, throughout, been treated with kid gloves.  He's never even been subpoenaed.  But the State of South Dakota has finally sued his corporation, SDRC, Inc... for documents.  Like, before they're shredded. 

THIRD NOTE:  Despite the Chinese investor losses, and Mr. Bollen's interesting bank account, South Dakota is still officially missing $120 million dollars in EB-5 fees and investments.  Where did it go?  Well, the state deficit in the last year of Mike Rounds' governorship was $120 million, so it didn't go there...  

Repeat after me:  "Life is always going to be stranger than fiction, because fiction has to be convincing, and life doesn't." Author Neil Gaiman.

Okay, on to GEAR UP!  Because we can't have just one major scandal about disappearing federal grant dollars in our tiny state.

A whole lot of  money (almost $3.5 million in 2011) went to a whole lot of people, except that almost none of it went to what the purpose of the grant was:  to give scholarships and education to Native Americans.  In fact, while 50-75% of all GEAR UP funds were supposed to be spent on scholarships according to the federal grant requirements, South Dakota requested (and apparently got) a waiver to spend NO money on scholarships, but to spend 100 percent of the grant on college preparedness and college readiness. And of course the best way to prepare Native American students for college was to hire endless consultants and directors of various sub-corporations.  (Angela Kennecke investigation)  The result is, $14 million dollars spent (somewhere), and 20 people went to college.   As my blogger friend Cory says, wouldn't it have been cheaper just to give the kids scholarships?  (dakotafreepress.com/2015/12/31/)


Some of you may remember from my last post on this that the Westerhuis' cell phones were cancelled the day after the arson / murder / suicides, and all the records were wiped, including who made a call and left a voice mail about 20 minutes before the fire.  As it turns out, the Westerhuis cell phones were through the Mid-Central Educational Cooperative (MCEC, the hub corporation for GEAR UP money, and for which the deceased Westerhuises worked). And it was MCEC that cancelled the phones and had the records wiped.  No explanation why they would do this before the ashes had even cooled on the ground...

And you may also remember that there was a missing safe, which apparently had legs like a dog and got up and trotted off because it hasn't been found yet.

From the "It can't get any weirder than this" files:

Governor Dugaard and Secretary of Education Melody Schopp
at the Interview

The US Department of Education tells KELOLAND News that in 2014, the South Dakota GEAR UP State grant file was destroyed and none of the documents are available.  (More Angela Kennecke investigation)

When KELO-TV investigative reporter Angela Kennecke asked for an interview with Secretary of Education Melody Schopp about GEAR UP and MCEC, she was told by the governor's office that she could only talk to Schopp with Governor Dugaard present. (see photo to the right)  Still trying to figure out whose hand needed holding...

And the Mid-Central Educational Cooperative had a forensic audit of their books, and presented it to a public meeting of the MCEC board. Said the auditors:  “We did not have access to financial records or other information from any other business or individuals.”  (For example, any of the multiple organizations that the deceased Mr. Westerhuis set up.)  And neither MCEC board members, nor the public, nor the media were allowed to ask any questions or even speak at the public meeting.  (http://dakotafreepress.com/?s=audit)

Just another day in South Dakota, where federal grant money can disappear like magic.

Did I mention that 4 in every 10 dollars in South Dakota revenue come from the federal government? (10 States most dependent on Federal Government)

Repeat after me:  "Life is always going to be stranger than fiction, because fiction has to be convincing, and life doesn't." Author Neil Gaiman.