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March 16, 2017 09:59 PM

Defense In GEAR UP Case Claim They Did What Westerhuis Told Them; 'Everybody Trusted Scott'

Lake Andes

The defense in the GEAR UP case says it all boils down to Scott Westerhuis and the misplaced trust of their clients in the Mid Central business manager.  But prosecutors allege that Westerhuis was not acting alone, saying that it took the roles of former Mid Central Director Dan Guericke and assistant business manager Stephanie Hubers, as well as former American Indian Institute for Innovation head Stacy Phelps to pull off the scheme that the Westerhuises had going. 

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According to the state, the Westerhuises embezzled as much as $2 million in grant money starting in 2009.  Guericke and Phelps are charged with altering contracts to ensure that the money trail wasn't followed out of Mid Central by auditors. 

Guericke and Phelps don't deny signing and backdating contracts dealing with the GEAR UP grant money that went from Mid Central to AIII and in Guericke's case, employment contracts with former Secretary of Education Rick Melmer and former Director of Indian Education Keith Moore.  But both men say they just thought they were recreating documents because the originals had been lost.  The state alleges the real reason was to avoid scrutiny from auditors about how the grant money was being spent. 

“This case is about two contracts and the most significant piece of evidence that came into the hearing today is the DCI agent who testified he is aware of no evidence that Stacy Phelps knew of Scott Westerhuis' scheme to change the contracts to avoid an audit," Phelps' defense attorney Dana Hanna said.

Guericke's defense attorney, Mike Butler, says his client's only crime was trusting Scott Westerhuis.

“My client is guilty of trusting Scott and Nicole. He worked there for 16 years; I think everybody trusted him. And he exploited it and when he felt he was going to be exposed, he did the ultimate horrible act.  The act of a coward.  He killed everybody and then he leaves these people standing in the wake and the Attorney General comes in and says, 'I need a few more people to pay.' I think it's just horrible what's going on," Butler said. 

“It would not have been possible for Scott Westerhuis acting alone to accomplish all that was discussed over the last two days. It took somebody addressing payroll. It took somebody making invoices, it took somebody finding matching grants; it took somebody testifying in front of the South Dakota legislature. There were a lot of things happening beyond just Scott Westerhuis," Attorney General Marty Jackley said.

Remember the phone call between Guericke and Westerhuis before the state pulled the GEAR UP grant from Mid Central?

A DCI agent testified that Guericke told him that he spoke with Westerhuis a day or two before the fire and Westerhuis informed him that Mid Central had been bankrolling AIII and it owed a lot of money. Guericke says he asked how much, but never got an answer before Westerhuis killed his family and himself. 

A former astronaut who was the first Native American in space is also the chairman of the board for Phelps' organization AIII.  He testified by phone from Idaho Thursday that he didn't realize all the problems with AIII and the inappropriate way Phelps was using grant funds. You can read more details of his testimony on KELOLAND.com.

Judge Bruce Anderson will decide at a later date what evidence will be allowed in trial. Both Hubers and Guericke want a change of venue, saying they can't get a fair trial in Charles Mix County because of all the publicity.

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