A former state fraud investigator is facing a second round of criminal charges, this time for bank fraud, wire fraud and money laundering.
Steve Knigge is accused of depositing bad checks to South Dakota banks and fraudulently applying for Paycheck Protection Program aid. He was scheduled to appear Wednesday in U.S. District Court.
Last year, Knigge allegedly deposited five checks, worth $142,000 in total, to accounts at Black Hills Federal Credit Union, Med5 Credit Union, and Wells Fargo Bank. Knigge was able to withdraw funds from three of the checks before they were determined to be fraudulent, according to an indictment filed last month.
Federal prosecutors say Knigge also submitted a Paycheck Protection Program application for a remodeling business that never existed. The federal coronavirus relief program was put into place in 2020 to help small businesses pay employee wages. Knigge is accused of fabricating transactions to obtain over $20,000 of aid.
Knigge served as an auditor and fraud investigator at the state Department of Revenue until 2015. He was found guilty of money laundering and bank fraud in 2018. The scheme involved tricking banks into wiring large sums of money to him by impersonating customers' emails. He was sentenced to 24 months in prison.
The new indictment charges the Rapid City man with bank fraud for depositing checks, wire fraud for transferring the funds, and money laundering for trying to withdraw funds in cash. The case was investigated by the IRS Criminal Investigation unit.
