Ex-fraud investigator pleads guilty to bank fraud, money laundering

Ex-fraud investigator

A retired fraud investigator for the South Dakota Department of Revenue pleaded guilty Monday to federal charges of bank fraud and money laundering.

Steven A. Knigge, 71, pleaded guilty to the two charges in U.S. District Court in Rapid City as part of a plea agreement. Charges of conspiracy, wire fraud, tampering and more charges of bank fraud and money laundering were all dismissed in accordance with the plea agreement. 

Knigge now faces a maximum sentence of 50 years in prison and a possible fine of up to $1.5 million.

According to his indictment, while Knigge was still employed at the state Department of Revenue in Rapid City in 2015, he participated in a scheme to defraud various people and companies. Banks in Georgia, Arizona, Washington and Texas were targeted with wire-transfer requests totaling $146,400, and Knigge sent part of the money he received to various people, the indictment says.

“In each case, the banks received emails containing false and fraudulent information, allegedly from an account holder, instructing a bank employee to wire large amounts of money to a separate bank account in South Dakota belonging to the defendant, Steve Arthur Knigge,” the 13-page document reads.

“In reality, in each case the account holder’s email address had either been hacked or mimicked (spoofed) using an email address that closely resembled the bank customer’s actual email address."

Of Knigge’s five money-transfer requests — made between July 9, 2015, and Aug. 19, 2015 — two succeeded in moving $42,200 to his bank accounts in Rapid City, according to the indictment. A Keybank branch in Washington state sent $18,700 to his Black Hills Federal Credit Union account, while the Arizona Bank & Trust wired $23,500 to his Wells Fargo account after receiving a false invoice with the heading “Steve Knigge Consults.”

Knigge admitted to bank fraud for the Arizona Bank & Trust wire transfer.

The charge of money laundering that Knigge pleaded guilty to stems from him wiring illegally obtained funds in the amount of $9,500 to Yusof Mohammed Jamal in Nigeria on Aug. 19, 2015.

During his court appearance Monday, Knigge said few words and wore a gray dress shirt and black slacks. When U.S. Magistrate Judge Daneta Wollmann asked him questions, he replied with short answers of "yes ma'am," or "no ma'am."

As part of the plea agreement, prosecutors are asking that Knigge also pay approximately $31,000 in restitution.  

The maximum prison sentence for bank fraud is 30 years, while money laundering carries a maximum sentence of 20 years. Knigge faced up to 90 years in prison before the plea agreement. 

A sentencing date has not been set.


Article From:- http://rapidcityjournal.com

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