Former State Employee Admits Bank Fraud, Money Laundering

Sep 18, 2017

A former employee of the South Dakota Department of Revenue pleaded guilty Monday, Sept. 18, to bank fraud and money laundering. Seventy-year-old Steven Arthur Knigge appeared in federal court in Rapid City before U.S. Magistrate Danetta Wollmann.

In a plea agreement, Knigge admitted to two charges, in exchange for dismissal of more than a dozen others.

U.S. Courthouse in Rapid City
Credit Victoria Wicks

Knigge admitted sending fraudulent emails to banks in five states. The emails were hacked or spoofed to appear as if they were sent from account holders in these banks. Knigge directed the banks to wire money to his account at Wells Fargo.

Knigge also admitted to sending the money overseas to others involved in the fraud.

The scheme ran from July to September 2015. Knigge was living and working in Rapid City at the time as an auditor for the Department of Revenue. He resigned shortly after he was interviewed by investigators.

On bank fraud and money laundering, Knigge faces maximum prison time of 30 years and 20 years, and maximum fines of $1.5 million.

Sentencing will take place after a pre-sentence investigation has been completed.