RAPID CITY, S.D.–A retired fraud investigator has been arrested on multiple federal charges of committing fraud.
Steven A. Knigge, 69, a former worker in the South Dakota Department of Revenue, has pleaded not guilty to multiple federal charges, including bank fraud, conspiracy, wire fraud and money laundering, for which he could face a combined maximum prison sentence of 95 years and up to $1.5 million in fines.
The indictment says that Knigge, while still employed at the Revenue Department in 2015, took part in a scheme to defraud various people and companies. Among the financial institutions allegedly effected was Black Hills FCU here, as well as banks in Georgia, Arizona, Washington and Texas, according to the indictment. In all, the indictment alleges Knigge was involved in bogs wire-transfer requests totaling $146,400.
“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,” according to the the 13-page document. “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.”
According to authorities, of Knigge’s five money-transfer requests — made between July 9 and Aug. 19, 2015 — two succeeded in moving $42,200 to his bank accounts in Rapid City. 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.”
The indictment states that when Black Hills FCU and the Arizona Bank & Trust got in touch with Knigge to tell him the money he received had been fraudulently obtained, he asserted to BHFCU that the money “rightly belonged to him as part of an investment. After receiving the money from Washington and Arizona, Knigge made eight transfers totaling $30,400, most of which were sent to Nigeria, the indictment adds.