Lawmakers move to subpoena state officials in corruption inquiry

Revenue secretary declines to provide details into fraud investigation and response

The Department of Revenue’s main office in Pierre. (Austin Goss/The Dakota Scout)

PIERRE — A South Dakota legislative committee tasked with overseeing state government agencies wants to issue subpoenas for high-ranking officials in the embattled Department of Revenue.

The Government Operations and Audit Committee (GOAC) voted seven to two Monday to subpoena Revenue Secretary Michael Houdyshell and Rosa Yaeger, head of the department’s Motor Vehicle Division. They’ll be issued pending approval by the Legislature’s Executive Board, who will meet early next week to vote on issuance.

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The motion to do so, brought by Huron Republican Sen. David Wheeler, came after Houdyshell and his legal counsel made a voluntarily appearance before GOAC, intended to provide more insight into incidences involving three former employees. In August, The Dakota Scout reported on a fake titling scheme undertaken by former supervisor Sandy O’Day, which bilked lenders out of roughly $400,000. Attorney General Marty Jackley later confirmed the allegations, but O’Day was not charged because she had died before the scheme was brought to law enforcement attention.

Earlier this month, Jackley announced charges against two more employees - Lynne Hunsley and Danielle Degenstein. Degenstein is accused of having abetted O’Day during her crimes and lying to investigators, while Hunsley faces a handful of charges that include two felonies for allegedly lying about a trade-in vehicle in order to escape paying the state excise tax on it.

Houdyshell indicated that he wouldn’t provide specific details about either incident to lawmakers, even during a closed-door executive session, because it could impede litigation. The charges against Hunsley and Degenstein are pending, while the threat of civil litigation by defrauded lenders involved in the O’Day incident looms large.

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