AG: 2 more indicted for fraud in DOR investigation

SIOUX FALLS S.D. (KELO) — Two more state employees have been indicted on fraud charges involving the South Dakota Department of Revenue.

One of the cases involves Sandra O’Day , who nearly two months ago we reported was suspected of creating fake car titles for campers and using them to secure hundreds of thousands of dollars in loans.

The Division of Criminal Investigation found 13 forged car titles between 2016 and 2023.
Initially, there was no evidence that anyone else was involved when Sandra O’Day was suspected of creating those titles and using them to secure almost $400,000 in auto loans.

However, now a second person, 51-year-old Danielle Degenstein, has been identified and indicted in connection to O’Day.

“It was a notary issue. She’s alleged to have been the notary on some of those transactions. It’s beyond the statute of limitations. There are admittedly other charges that could be brought. But with respect to her, we’ve charged Misprision of a Felony because of statements she made to law enforcement,” Jackley said.

Jackley says Degenstein’s statements when asked by law enforcement about O’Day, “allegedly were not accurate,” and led the DCI down wrong paths.

The second state employee indicted is 63-year-old Lynne Hunsley on seven different counts, five of which are felonies including forgery, and altering or forging certificate of title.

“Allegedly she purchased a new vehicle and in order to avoid some of the excise tax, indicated that there was a trade in that there was not. Therefore, reduced the tax consequences and liability,” Jackley said.

While describing these two cases, Jackley also shared a proposal he’s working on called the “Government Anti-Corruption Act” he’s planning on bringing to the legislature this year.

“My job as attorney general is primarily to step in as an enforcement when the bank is robbed. It’s time to take steps to make sure the bank isn’t robbed,” Jackley said. “I think the role of that is mandatory reporting to the attorney general, whistle-blower protections, stronger auditing and then a level of transparency. And I’m willing to have that transparency be on the attorney general also.”

Jackley also suggested an additional auditor position could be one way to prevent future fraud.

Both Degenstein’s and Hunsley’s initial court appearance is set for October 28.

Earlier this year, Jackley announced a former Department of Social Services employee allegedly stole more than $1.7 million. Lonna Carroll has pled not-guilty in Hughes County Circuit Court.

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