We have developments in the criminal cases against two people charged in the GEAR UP investigation in South Dakota.
You’ll remember three people are facing criminal charges in the GEAR UP investigation: former Mid Central Director Dan Guericke, Former Assistant Business Manager Stephanie Hubers, and former head of the American Indian Institute for Innovation, Stacy Phelps.
All three are back in court on August 18. In the meantime, there are new developments in Hubers’ and Phelps’ cases, starting with evidence the state is introducing against Hubers.
Review Stephanie Hubers Paperwork
Stephanie Hubers, a close friend and co-worker of Scott and Nicole Westerhuis, is accused of taking $55,000 in hush money over a five year period from the Westerhuises to keep quiet about the money they were stealing. Now the state says it will introduce new evidence to prove it, including testimony.
According to court documents, the state says Hubers knew that the American Indian Institute for Innovation was taking money from Mid Central Educational Cooperative to cover its payroll.
Prosecutors say only Hubers and the Westerhuises knew that the Westerhuises were stealing money from AIII, including writing checks to themselves from the AIII bank account for personal use. Hubers allegedly cooked the books for the Westerhuises to help them steal the money.
The state says she also knew after Scott Westerhuis killed his family and himself that AIII owed Mid Central nearly $1 million for payroll that the Westerhuises had stolen.
“We’re outlining for potential argument where the money originated from, and steps that were taken to ultimately conceal how the money was being spent,” Attorney General Marty Jackley said.
Jackley says Hubers was so good at hiding their activities in the books, that Director Dan Guericke and the Mid Central Board didn’t know anything about it.
Hubers told investigators that when the South Dakota Department of Legislative Audit started looking into Mid Central’s accounts, she sat down with the Westerhuises and they “revamped the balance sheets and put a line in that said AIII payroll and then everything balanced.”
Hubers also told investigators that if any of Mid Central’s member schools questioned why the ending month balance wasn’t the same as the beginning balance, Westerhuis made up excuses and that she kept her mouth shut because she knew what was really going on.
The state intends to prove that Hubers was a participant in a scheme and that she “could have exposed Scott and Nicole’s activities,” but didn’t because she was benefiting financially.
Review Stacy Phelps Paperwork
Meanwhile, prosecutors and Stacy Phelps’ defense attorney are fighting over evidence in his case.
Late last month the state introduced financial records from the American Indian Institute for Innovation of $240,000, in what prosecutors allege was personal spending by Stacy Phelps of GEAR UP grant money.
After the Westerhuis tragedy, a Mid Central employee gave Phelps a box of AIII receipts and then Phelps gave his attorney Dana Hanna the box. The state wants him to turn it over.
“It’s really the state’s position that the law does not allow someone to avoid an investigation or a prosecution by providing potential evidence to an attorney. Certainly if that were the case, every murderer would give their weapon to a defense attorney to try to avoid prosecution,” Jackley said.
Late Thursday afternoon, Hanna filed a response in Charles Mix County. In the documents, he says he had no written request from the state for the receipts and records. He says the receipts are Phelps’ personal property that he turned over to Hanna for review.
Hanna also says his client can’t get a fair trial because Attorney General Marty Jackley has talked extensively to the media, including KELOLAND News about Phelps’ case.
When it comes to the state’s allegations of Phelps’ personal spending of hundreds of thousands of dollars in grant money, Hanna argues in an email that all the money spent by AIII was ultimately approved by the South Dakota Department of Education.
The judge in the case says he intends to make a decision about whether Hanna has to turn over the receipts on Friday.