Retired South Dakota state official sentenced in scam

RAPID CITY, S.D. — A retired fraud investigator for the South Dakota Department of Revenue has been sentenced to two years in federal prison for bank fraud and money laundering.

Steven Knigge, 71, was accused of fraudulently asking banks in several states to wire money to an account belonging to him while he was working as a state official in 2015. Banks in Georgia, Arizona, Washington and Texas were targeted.

Court documents show the Rapid City resident requested a total of $146,000 from five banks between July and September 2015. Most of the transactions were blocked by banks, but about $42,000 were transferred into his account.

Knigge also wired about $30,000 of the scammed money to individuals overseas, including $9,500 to Nigeria, which constitutes money laundering.

Knigge reached a plea deal with prosecutors last fall and pleaded guilty. Charges of conspiracy, wire fraud and tampering were dismissed.

He received his prison sentence Friday. Knigge was also ordered to repay a bank in Arizona and Washington a total of about $32,000, the Rapid City Journal reported .

"You were perfectly armed not to get caught in such a scheme," U.S. District Court Chief Judge Jeffrey Viken told Knigge.

Knigge's attorney, Angela Colbath, said he committed the offenses amid marital problems and after meeting someone overseas on an online dating site.

Assistant U.S. Attorney Benjamin Patterson said Knigge first started using his own money to send money overseas in November 2014. He said Knigge ran out of funds, and then used money from his children's accounts and assets before delving into "criminal conduct."

Patterson said Knigge tried to cover up his crimes by deleting 1,800 emails off his government-issued computer while working at the state revenue department in Rapid City.

Knigge told the court that he's still trying to understand why he committed the crimes, which he said brought him heartache and lost him friendships.


Information from: Rapid City Journal,

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