A credit union member who worked as a fraud investigator and auditor for the South Dakota Department of Revenue was indicted on 22 felony charges for hacking emails and using them to steal more than $145,000 from five banks in four states.
Steven Arthur Knigge, 69, pleaded not guilty in U.S. District Court in Rapid City S.D., to one count each of conspiracy and tampering, six counts each of bank fraud and wire fraud, and eight counts of money laundering.
According to court documents, Knigge used an email of a customer at a branch of the Bank of the West in Arizona and instructed the financial institution to wire more than $48,000 from that customer's account to his account at the $1 billion Black Hills Federal Credit Union in Rapid City, S.D., in July 2015.
In addition, he also used the email of a customer at the First Landmark Bank branch in Georgia and instructed the bank to wire $28,503 from the customer's account to his credit union account. And at a KeyBank branch in Washington, he allegedly used a bank customer's email to wire $18,700 from the customer's account to Knigge's Black Hills account.
Two of the wire transfers by the sending banks, however, were successfully blocked before the funds were deposited into Knigge's Black Hills account.
What's more, once a Black Hills employee determined the funds deposited into Knigge's account were fraudulently obtained from the KeyBank account, the money was returned.
Nonetheless, through email communications with Black Hills, Knigge asserted the money wired into his account rightfully belonged to him as part of an investment and that he was attempting to straighten it out, according to court documents.
In August 2015, Knigge committed the same wire fraud crimes by using emails of customers at Pioneer Bank in Texas and Arizona Bank and Trust. He instructed the banks to transfer more than $50,000 to an account Knigge held with a Well Fargo Bank branch in Rapid City.
Knigge wired some of the $23,500 stolen from Arizona Bank and Trust to Nigeria. He also wired funds to Yusof Mohammed Jamal, Awoyemi Omotunde, Mike Lai, Umeano Jerry and Scott Easley. Prosecutors did not indicate in court documents where these individuals were from.
After being questioned by federal investigators in September 2015, Knigge attempted to delete numerous emails on his computer at the South Dakota Department of Revenue, federal prosecutors noted in court documents.
In addition, shortly after being told by federal authorities that he was being investigated for wire and bank fraud, Knigge retired from his job.
Court documents did not say how Knigge obtained the email addresses.
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