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topicnews · August 30, 2024

DCI launches third investigation into South Dakota government agency

DCI launches third investigation into South Dakota government agency

State investigators are investigating a third possible crime that occurred at a South Dakota government agency.

South Dakota Attorney General Marty Jackley confirmed in a press release Friday that the state’s Criminal Investigation Department is investigating a “criminal matter” at the IRS.

When asked by the Argus Leader, the Attorney General’s Office did not explain the circumstances of the alleged incident.

The Dakota Scout reported Friday that Lynne Hunsley, a finance officer at the agency, was placed on leave on charges of falsifying vehicle titles.

In a statement to the Argus Leader, Bobi Adams, deputy director of communications for the DOR, wrote that the department uncovered “suspicious activity by an employee” after implementing new oversight policies and controls.

“This employee has been terminated,” Adams wrote. “The situation has been escalated to [DCI] and the Department of Legislative Audit.”

This came after DCI launched an investigation into Sandra O’Day, a former IRS employee who abused her position to create 13 fake vehicle titles between 2016 and 2023 to secure $400,000 in loans. O’Day, who worked for the company for three decades, died of cancer earlier this year.

According to Open SD, Hunsley’s annual salary as of Friday is $71,546.46. O’Day’s final annual salary is $66,739.89.

“The criminal matter was reported by the IRS and is independent of the prior property fraud investigation,” Jackley wrote in a press release. “As with any other criminal investigation, updates on this investigation will be provided as permitted by South Dakota law.”

Eric Ollila, executive director of the South Dakota State Employees Organization, sees the “root cause of these embezzlements” as a result of a lack of hiring within the government. He said this puts pressure on current employees, who are faced with heavier workloads and may be encouraged to cut corners.

This also allows criminals to identify and exploit weaknesses in their departments, Ollila said.

“If employees are approving their own documents or expenses because the legislature cannot hire more staff, then I think that is a sign that embezzlement is possible,” Ollila said. “The state is putting its departments at a disadvantage and forcing people to do extra work. This eliminates the checks and balances in the system.”

This is the third investigation involving a South Dakota government employee made public by the Attorney General’s Office since July.

Jackley first announced charges against Lonna Carroll, a 68-year-old Iowa woman who allegedly stole $1.78 million in state and federal funds from Child Protection Service, a division of the South Dakota Department of Social Services.

According to a state investigation, Carroll abused her position by requesting funds from CPS and then approving her own applications, then intercepting approved checks that were actually intended for a specific child.

Carroll is said to have made more than 500 unlawful requests between January 1, 2010, and March 24, 2023. The embezzlement was discovered by the DSS in February of this year.

Carroll’s case will go to trial in Pierre on Dec. 4, the South Dakota Attorney General’s Office said in a news release. Carroll previously worked as a project assistant for DSS.

Carroll faces two counts of grand larceny.

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