You, Identity Theft Victim

Today’s article outlines the massive Equifax identity theft that’s still surfacing today. For the first steps in protecting yourself, you can jump to the distant section on discovering whether you have been targeted and obtaining security features that have been made free for you.

Monetizing Your Body

Commercial law can be a peculiar thing, who owns what and why companies have certain rights you don’t. For example, you enter a hospital for surgery. Doctors snip out some piece of you. Likely, you never question who owns that removed bit of flesh or bone and you’re happy just to get rid of it.

Suppose doctors discover something unique and potentially highly profitable in that tonsil or toenail, your appendix or gall bladder. Your DNA might save millions of lives around the planet and earn billions of dollars… none of which you’re entitled to. Unless you signed an agreement otherwise, the physician or hospital owns that biological bit of you including the rights to exploit it. One woman actually applied for a patent on her own body for such a circumstance.

Monetizing Your Life

Financially successful corporations make tidy profits collecting information about you, not merely your earning and spending habits, but where you live, work, school, shop (or shoplift), if you’ve been to court and why. The peculiarity is you don’t own that data. Huge companies do and often their information is wrong and sometimes misused.

A few years ago, credit bureaus were finally forced to hand out credit reports to those who demanded them (a) no more than once a year or (b) if you were turned down for credit. But… odds are high you’ve never seen your full report, because it can contain information the bureaus don’t want you to know. When a mortgagee or a banker or employer receives your credit report, a line at the top might instruct them not to show the report to the subject (you or me), followed by information or opinions they don’t want shared with the… well, victim.

For example, the redacted secret part on my own credit report read “suspected of using false address.” This came about in two ways. First, I had been buying property, a dozen addresses were associated with my name, so I relied on a post office box, much as my grandmother had done. Second, the US Postal Service allows post box renters to use the post office’s physical address, quite handy for imprinting on checks. Such an address looks like:

Chandler Hammett
1201 Post Industrial Drive #107707
Los Angeles, Ca 90210-7707

In my case, the comment didn’t particularly affect me, but imagine someone applying for a sensitive job. The HR department reads the line “suspected of using false address,” and suddenly the potential employee is rejected with no reason given. The applicant should have a right to know about that careless assessment, but has no way of learning of or correcting the report. Why? The bureaus own the reports, you and I don’t.

Monetizing Miscreants

In a past article, I pointed out that curious hackers– the benign exploring kind– can receive severe prison sentences for merely poking around in data warehouses and behind the scenes in web databases. I argued that bankers and merchants who fail to secure vaults, leave doors unlocked, and don’t hire a watchman should be punished as well. If any major office didn’t lock its doors, could you blame kids for wandering in and looking around?

Let’s discuss Equifax, which has suffered an extraordinary data loss to a ‘state actor’… presumably China, North Korea, or Russia. Stolen is your name, social security number, credit card numbers, drivers licence, address, and all the minutia that makes you you. With this kind of data, thieves can lie low for years before springing into action.

I say that as fact, because thieves (state actors) stole the records of the vast majority of working and retired citizens in two separate breaches. The second theft (the first was acknowledged only after the second came to light) affects between ¾ and ⅞ of American adults. Equifax admissions have edged upwards from 153-million stolen files to 182-million; outside assessments estimate as high as 200-million or more.

Note: Canadian and British records have been stolen in the same breach. Equifax says they’re “working with UK regulators,” whatever that means.

Monetizing Misfortune

Equifax executives cashed in stock before the breach became public, attempting to option their knowledge for their personal profit. Then after the big reveal, the company offered to help protect user accounts through a subsidiary— for a fee. Equifax and their security pet since had their arms twisted into providing the services free.

Political response has been as antithetical as you might expect. Congressional members of one political party sent a demand letter to Equifax with a deadline for explaining details and corrective actions. Contrarily, in defense of Equifax and in fear of impacting deregulation, the other major party is working a bill through Congress to limit the liability of credit bureaus and other companies.

Have You Been Hit?   866-447-7559

Here Equifax estimates whether or not your data has been sucked overseas. Be cautious of similar links, because identity thieves are working those, trying to snatch whatever data they can. Use this link:

☞  Has my data been stolen?

Note that updates may still be made, so it’s possible an all-clear this week might turn into a false negative next week. Tap that link to see if you’ve become a victim:

Once you receive an indication, you can decide what to do next. Equifax can take several days to email you about options (now free) that they provide. The FTC offers suggestions and guidelines.

Equifax will provide ninety days of ‘fraud alert’ (notification of identity theft) and a year of monitoring, which can be renewed indefinitely. You may also choose to lock or freeze your account and ‘thaw’ it only when you apply for a loan or other use.

Use the phone number (866-447-7559) above if you have questions or need help you can’t find elsewhere. Contact the other credit bureaus to notify them your identity and data has been compromised.

Equifax Inc. P. O. Box 740241 Atlanta, GA 30374-0241 800-685-1111 800-525-6285 1150 Lake Hearn Drive Atlanta, GA 30342 fraud: 800-525-6285 web site

Experian P. O. Box 2002 Allen, TX 75013-2002 888-397-3742 888-243-6951 701 Experian Parkway Allen, TX 75013 fraud: 800-397-3742 web site

Trans Union Corp. P. O. Box 1000 Chester, PA 19022-1000 800-916-8800 800-888-4213 2 Baldwin Place Chester, PA 19022 fraud: 800-680-7289 web site

Let us know if you’ve been hit. In the meantime, be safe out there– state actors abound!

Yet Another Computer Scam

 WARNING A scam involving Google and clever programming sleight-of-hand has hit the scene. It’s not entirely new– a prototype showed up in 2014– but it fools many professionals. Apologies in advance for the technical parts below.

A new month, a new scam, this one brought to our attention by a reader. Although widely reported, this scam hasn’t shown up in the ACM Risks Digest yet. Surprise– the scheme starts with your GMail where a note from a friend or colleague contains a link to another page or document. You click and receive a message you must log in again. Happens every so often, annoying but sign in again for security.

A Google log-in page shows up– the URL field (web page address) contains google.com. Enter your name, enter your password. Click. The document your compatriot sent now appears.

You may not know it, but you just lost exclusive control of your Google account. Your pal didn’t send that email and the link was plucked out of your emails.

Let’s look at the sign-on dialogue boxes again. Which one is counterfeit? Hover your mouse over them for the answer, but the fact is, they’re indistinguishable.


The insidious part is that email web sites– Yahoo and AOL included– train us by periodically forcing us to relog in. Hold on… didn’t the URL box contain google.com?

Yes. Over the years we’ve seen clever fraudsters incorporate target domain names similar to this:

http://w5.to/google.com

The trick here is that the real domain, web address of the bad guys, is w5.to. The google.com is only a web page set up to fool you. Other examples might look like the following:

http://citibank.net.w5.to/index.html

This is a variation of the bad guy’s domain, w5.to, above.

http://citybank.net

Here the bad guys registered a variation of the real name made a little easier by CitiBank using a non-standard spelling. These three examples are reasonably clever and some scammers don’t take that much trouble. However, this new one can catch even professionals by surprise:

data:text/html,https://accounts.google.com/ServiceLogin

The clue something is very wrong lies in the first three words, data:text/html – you shouldn't see that at all. The opening letters of an URL don’t have to be http – they can be file, data, help, about, chrome, gopher or possibly another protocol, but ‘data’ is the only hint the page is abnormal.

Browsers have become more sophisticated over the years, so web pages might include additional capabilities such as setting preferences. The ‘data’ keyword allows HTML to be embedded in the URL field, but more insidiously, it allows JavaScript, and that’s how this particular exploit fools us. Following the ServiceLogin part of the URL are dozens upon dozens of spaces so you can’t see what comes next. Far beyond the right side of that URL field is where the real sorcery begins with <script…>. This malware program throws up a fake Google sign-in page to capture your ID and password.

Expect Google to quickly mount an update, but beware, look ever more critically at URLs when you’re asked to type in your credentials. It might save your on-line life.

If Only We Had LAWS Against This Stuff...

"If only we had LAWS against this stuff..." and other crazy statements:
Okay, a few reminders just to catch everyone up.

Joop Bollen and then-Governor,
current SD Senator, Mike Rounds,
in happier days

• Back in 2009, Joop Bollen was appointed to run EB-5 – which was a federal program designed to trade green cards to foreign investors for $500,000 a whack - by our former governor, current Senator Mike Rounds, who, when questioned recently about all of this, said, "The state of South Dakota would use different federal programs on a regular basis and you always assume that if the federal program is in place that they have a control process in place. We’re finding in some cases that that is not the case " (Mike Rounds interview).  Like when you put Joop Bollen in charge of that federal program, allowed him to privatize it in SDRC Inc., and told everyone what a great job he was doing?  (I swear to God, you can't make this stuff up... Sadly...)  

• There's still as much as $120 million missing from the EB-5 program. 

• For two years, the only person held responsible for any missing funds was Richard Benda, who according to our fearless AG shot himself in the stomach with a shotgun in a field because he'd embezzled $500,000.  

AND NOW FOR THE LATEST !!!  HEADLINE NEWS !!!

First of all, our own Attorney General, Marty ("I'm going to be running for governor in 2018, so I need to get something on paper") Jackley has FINALLY indicted Joop Bollen on five felony counts of violating SDCL 44-1-2, “unauthorized disposal of personal property subject to security interest.” In other words, Bollen used EB-5 money, transferred to his own private corporation, SDRC Inc., for his own personal purchases.   $300,000 here, $96,000 there, to a total of about $1.2 million. He sent some to Pyush Patel of Griffin, Georgia (who owns gas stations and has been participating in Bollen's corporation creationism since 2005), some Bollen just pocketed, and some (and this is my favorite part) Bollen spent on Egyptian artifacts from Christie's and the Harer Family Trust.

NOTE: Bollen, through his lawyers, claims he's being scapegoated.  Mr. Bollen is also free on an unsecured $2,500 bond. (That should make you spit your coffee out in shock:  let's face facts, you'd have to post a lot more money than that if you'd just robbed a casino and gotten only $200 bucks.)

NOTE WITH FACEPALM:  Nor has the Dutch born and raised Bollen been asked to surrender his passport.  Jackley said that “at this point” he “did not have concern” about the passport, “as long as we’re made aware of certain travel,” since Bollen has “significant ties financially to this community.” (Bollen Initial Appearance - dakotafreepress.com - once again, thanks Cory Heidelberger for GREAT coverage!)  Again, you'd have a rougher time of it if you'd robbed a casino and gotten only $200 bucks...

And here's the best part: Right now our fearless AG Jackley - who, as I said, for 2 years has blamed Richard Benda for any and all EB-5 problems - is now blaming the whole mess on (drum roll, please!) a lack of tough laws making conflict of interest a felony! Personally, I would have thought that our laws making embezzlement, fraud, etc., felonies would have been enough, but apparently not.  We need more.  So it's really all the South Dakota legislature's fault...

Oh, and one quick note about the Gear Up! scandal (6 people dead and counting) and the missing Westerhuis safe (The Chinese Are Coming). “I don’t know where that safe is at,” Jackley said. “I don’t know if it burned in the fire or if Scott Westerhuis took it out and threw it in the Missouri River.” (Jackley Conspiracy Theories, Argus Leader)  Feel free to insert obvious questions here:

 __________________________________________________________________________

Marty Jackley

Meanwhile, Mr. Jackley, having apparently solved everything about EB-5 and Gear Up! (except that pesky $118.5 million in EB-5 money, the pesky $4 million in Gear Up! money, and the pesky missing Westerhuis safe), is far more interested in investigating the destruction of the Flandreau Santee Sioux Tribe's marijuana crop in November (some of the burning was shown on television) after the tribe suspended plans to legalize marijuana on its reservation.

"I don’t think for a minute that they destroyed $1 million worth of marijuana. I don’t know where that went and it’s an open case. We never shut that case," Jackley said in an interview with Argus Leader Media. “We never got an opportunity to check what was destroyed." (Up in Smoke?)  

Priorities, priorities...

And now, repeat after me: "Life is always going to be stranger than fiction, because fiction has to be convincing, and life doesn't." Author Neil Gaiman.

Will keep you posted, from South Dakota, where we talk like Mayberry, act like Goodfellas, and the crazy just keeps on coming.

 

Barney Got a Gun

by Eve Fisher

I hope everyone had a Happy Easter, Good Passover, and other appropriate holiday.  Up here, one of our Easter Eggs held indictments - at last - for three in one of our South Dakota scandals - Gear Up!

(Wouldn't you know it, the cheap one, only a few million missing, whereas EB-5, with $120 million missing taxpayer dollars, is still blamed on the guy who supposedly shot himself in the stomach in a field while hunting...)  

But let us rejoice in small favors.  What happened was that our own Attorney General, Marty ("I'm going to be running for governor in 2018, so I need to get something on paper") Jackley held a press conference and announced that three, count 'em THREE people were responsible for aiding and abetting Scott and Nicole Westerhuis in their embezzlement and fraud.

Quick reprise:  Early in the morning of September 17, 2015, a fire destroyed the home of Scott and Nicole Westerhuis and their four children in Platte, South Dakota.  It was later declared ed by AG Marty Jackley that Scott Westerhuis shot his entire family, torched the house, and then shot himself. There is still the ongoing mystery of who called Nicole's cell phone in the middle of the night, right before the fire, and what happened to the safe that apparently got up on its hind legs and trotted out of the house before the carnage.

36705 279th Street, Platte, SD.
screen cap from Google Maps,
2015.09.22.

Further reprise:  Scott Westerhuis was the business manager of MCEC, the Mid Central Educational Cooperative, which is, among other things, a hub for distributing federal grand monies to other non-profit organizations, including Gear Up.  Nicole also worked there.  Scott Westerhuis set up as many as 7 non-profit corporations related to Indian education, including - but not limited to! -  the American Indian Institute for Innovation, a/ka AIII.  Scott Westerhuis was incorporator of all of these, CFO of some, including AIII, and his wife Nicole was business manager of at least some of them.  And the Westerhuis family lived on a $1.3 million rural Platte property that included a 7,600 square foot house, a $900,000 gym complete with basketball court, weight-lifting area, and computers, and a loft with a meeting room, rooms for guests, and a kitchen.  This was on an official combined MCEC salary of $130,549.82.

Okay, back to the news conference!  On March 16, 2016, Marty Jackley announced that he filed charges against and arrested: 

Daniel Mark Guericke, MCEC Executive: 2 counts of falsification of evidence, class 6 felony, punishable by up to 2 years imprisonment in the state penitentiary and/or $4,000 fine, 4 counts of conspiracy to offer forged or fraudulent evidence, class 5 felony, punishable as a Class 6 felony, with a maximum sentence of 2 years imprisonment and/or $4,000 fine.  Full transcript of complaint here: (PDF of Complaint filed)

Stephanie A. Hubers, Former MCEC interim business manager: 1 count of grand theft, class 4 felony, punishable by up to 10 years in the state penitentiary and/or $20,000 fine, 2 counts of grand theft by deception, class 4 felony, punishable by up to 10 years in the state penitentiary and/or $20,000 fine, 3 alternative counts of receiving stolen property, class 4 felony, punishable by up to 10 years in the state penitentiary and/or $20,000 fine.

Stacy Lee Phelps, Former AIII (see above)/GEAR UP operator: 2 counts of falsification of evidence, class 6 felony, punishable by up to 2 years imprisonment and/or $4,000 fine, 2 counts of conspiracy to offer forged or fraudulent evidence, class 5 felony, punishable as a Class 6 felony, with a maximum sentence of 2 years imprisonment and/or $4,000 fine.

NOTE:  Mr. Phelps' lawyer is mounting a vigorous defense, based on the idea that Mr. Phelps is a scapegoat.  Perhaps he is.  (If so, he should be thanking his lucky stars that he isn't lying in a field somewhere...)  

Among other things, Guericke, Phelps, the Westerhuises and “other unknown co-conspirators" were all accused of falsifying and backdating contracts, including those of 

• Dr. Rick Melmer, the Dean of Education of the University of South Dakota, who (memorably) couldn't remember nine $1,000 in payments live on South Dakota television, and 
• Keith Moore, Governor Mike Rounds' director of Indian education. 

So far, neither Dr. Melmer (who as Secretary of Education under Governor Mike Rounds, moved supervision of Gear Up from the DOE in Pierre to MCEC in Platte), nor Mr. Moore (who also received a good chunk of change), nor former Mid-Central board chairman Lloyd Persson (who actually signed the bogus contracts) have been indicted, and Jackley has indicated that they won't be.

Nor has anyone asked Secretary of Education Melody Schopp to resign, even though she let MCEC continue their interesting approach to funding for three years after she noticed that something smelled a little funny.  Apparently, they are still looking into at least two other MCEC staffers who (according to Hubers) blackmailed some money out of Westerhuis.  Cory Heidelberger suggests that Mr. Jackley look into the board members of the American Indian Institute for Innovation, which was, apparently, the hub of moving stolen money around.  And no one has mentioned my favorite, Dr. Joseph Graves, Mitchell, SD School Superintendent, who received money from the MCEC for teaching "Teaching American History" in a state that has made it optional.  

Also, we're down to only $1 million missing, instead of $14 million, but hey, it's still better than the EB-5 mess.  Right?  

Angela Kennecke, KELO-TV

Well, right now, we're all waiting for the other shoe to drop.

"Sources who have first-hand knowledge within the Department of Education tell KELO-LAND News there were questionable expenses involving GEAR UP grant money as early as 2006 that were brought to the attention of department officials."  Angela Kennecke, 3/23/16

What this means, in South Dakota speak, where no one ever admits anything is actually WRONG, is that there's something else coming.  Possibilities:

(1) People ('sources') know that more hell is about to break loose and are getting ready to get out from under it.

(2) It's possible that someone ('sources') in the higher-ups is authorizing a leak, which is the first step to a flood.

(3) They found the safe.  

Okay, the last one's HIGHLY unlikely.  And if they do find it, it'll probably just be full of pork.

And there's the recent news that "There have been several million dollars diverted out of school funding at Lower Brule [reservation] and as a result they had to go into restructuring which is a federal requirement when you have really low school performance. And so they hired AIII Stacey Phelps, which at the time was the head of AIII, and Scott Westerhuis was the COO. So they (Lower Brule) brought in AIII to manage Lower Brule schools and that had been going on for about two years."  (Thanks again, Cory Heidelberger and the Dakota Free Press!)  And people wonder why the Reservations up here are still in a world of financial hurt...

Anyway, that's the latest update from South Dakota, where we talk like Mayberry, act like Goodfellas, and the crazy just keeps on coming.

 

Duping Delight

“He lied for pleasure,” Fuselier said— Supervisory Special Agent Dwayne Fuselier, a clinical psychologist and an FBI investigator.
In this case, he was talking about Eric Harris of Columbine notoriety. But millions of people who aren’t mass murderers also lie for pleasure. They tread beyond compulsive, they go beyond obsessive– they lie for enjoyment, gratification, and amusement.

Psychologist Paul Ekman says lying represents a key characteristic of the psychopathic profile. He calls it ‘duping delight’.

It’s rare for the average person to get to know a criminal mind. I’m not talking about the desperate committer of crimes or those who’ve lost their way, but people who deliberately set out to steal or defraud for no other reason than they wish to.

Oddly enough, most fraudsters I’ve personally known have been disbarred lawyers. Truly. Wait, I’m not picking on lawyers as a class nor am I providing fodder for lawyer jokes– we can do that another time if my friend Dale turns a blind eye. But for unexplained reasons that seem beyond coincidence, the major swindlers I’ve encountered have been former attorneys and one a former judge. They all hail from Florida as well, formerly a haven for con artists and scammers selling underwater parcels of land.

My friend Sharon sent me an Orlando Sentinel article titled “Husband of disbarred attorney sues her, alleging fraud, forgery.” Strange as that sounds, it barely hints at the machinations involved… you’ve got to read the article.

It put me in mind of another lawyer whom I’ll call Dr. Bob Black.

Judge Not Lest… an opinion piece

I met ‘Dr. Black’ at a local college campus. We chatted between breaks. He failed to let on he’d been disbarred, although he mentioned numerous times he’d been a judge. He shared he was raised in financial comfort and had been well educated. His relationship with his parents, especially Bob Sr, sounded complex and later left me wondering about the residual effects.

Black had bought a minor mansion in an Orlando historical district. He’d gutted it and was in the process of slicing its interior into small apartments when the Historical Society called a halt, pointing out that ruining a historical building and establishing multi-family residences in a single-family zone was forbidden. Unfazed, Black put it up for sale, advertising it as partially converted to apartments but possibly not mentioning the legal stumbling blocks.

At the time of his real estate ventures, Bob was also hawking a computer he called the Macintosh XLS. I recognized the machine as an Apple Lisa, the forerunner to the Mac, although Black claimed it was not a Lisa but a super-advanced product that outclassed other computers— especially its price of $10 000, about five times the price of a Mac at the time.

A little research showed he was buying refurbished units from a company in Shreveport, bundling them with freeware and shareware, and offering training worth “thousands of dollars.” As it happened, he was paying less than $40 for adult classes at Winter Park Tech where my friend Geri taught. Geri found herself with more than one of his victims in her classes, including one man whose wife was dying of cancer and was barely holding together emotionally.

The Scheme

Black was buying outdated, refurbished computers for a few hundred dollars, adding freeware (free software) and $40 worth of classes, and then selling them as high-end products to the unsuspecting.

Dr. Black was a snappy dresser. Even at casual gatherings he wore suits, and under his suits he wore sweater vests, not a common sight in Florida.

He liked talking to me, even when I’d call him on some of his shenanigans. When I asked barbed questions, he showed a politely bland face, no anger or irritation at all. I wondered if he masked his feelings or felt nothing at all. Did he choose me just to have one person to talk to?

He claimed to have been a judge, and apparently that was true. The ‘Dr’ part he tacked onto his name– He liked the sound of it. Beyond the connotation of ‘juris’, it had no more meaning than the ‘Dr’ in Dr. Pepper.

Judgment-Proof

Black confided he was ‘judgment-proof’ and explained he maintained real property in his wife’s name and kept all his other assets offshore. The topic of disbarment didn’t disturb him… he simply acted as if he didn’t hear those questions, although once he hinted at a political misunderstanding.

One of his controlling peculiarities was to arrange meetings with clients at odd minutes on the clock, say 9:42 or 10:13. Black claimed he was too tightly scheduled to waste appointments on the half or quarter hour.

His attitude toward ripping off people was entirely incomprehensible to most observers. Black exhibited zero contrition but especially no shame whatsoever. He displayed a bullying arrogance toward anyone he could. He may have fancied himself superior to lesser people; others were merely ants that he righteously stepped on if they got in his way. Bob seemed to typify a sociopath in every sense of the word.

The Detective and the Reporter

A pair of related calls came in on my consulting line. Geri had referred one caller, a former New York City homicide detective who’d been defrauded by Black. The other was from our local WCPX star consumer crusader, Ellen MacFarlane. The detective happened to know Ellen’s mother, a NYC judge, and her sister, a force within the New York Department of Consumer Affairs. They asked me if I would provide technical knowledge for an exposé of Dr. Bob Black.

Ellen suffered from multiple sclerosis, but she was a fighter. I sat in on the interviews, sometimes feeding her questions. Black’s strategy was to answer no question directly. If she asked him about reselling obsolete equipment, he would respond with a rambling discourse on Steve Jobs, Reaganomics, and local gardening regulations. He exhausted the lady, but Ellen managed to air the segment.

The detective wasn’t done. He sued Black and called me as a witness.

We sat waiting for Black in the judge’s chambers. At nearly half-past the hour, the phone rang. The judge put it on speaker phone: A whimpering Black claimed he was deathly ill.

The judge said, “Frankly, Mr. Black, you don’t have much credibility around this court. However, I’ll continue this case if you get a doctor’s note to me within three days.”

Upon my return to court, I bumped into Black. He always acted polite to me and he did so this time, impervious to my cool nod. This time, the parties indicated they were considering a settlement. I wasn’t called to court again so I don’t know what, if any, judgment or restitution was involved.

To say Black was a scoundrel or a rascal is to diminish the impact he had on others. The Yiddish word ‘gonif’ comes close, implying a thief and a cheat.

Most of us would like to leave the world a better place. Besides social currency, reputation is a reflection of future self, the part that remains after we’re gone. We can’t all be great authors, musicians, artists, nurses, and teachers, but we can be good people. People who don’t care are alien to the rest of us.

I’ll bracket this article with “in my opinion,” but Black made a living from cheating people. He could argue he gave naïve people what they asked for (“They should have done their homework”) and what he promised (“So what if I sold them free software and who’s to say the $40 course isn’t worth thousands”).

For all that, my greatest astonishment centered around his lack of shame. I used to attend LegalSIG, a special interest group run by a local law firm concerning matters of business and law. Black would attend, showing no chagrin, no humiliation, not the least discomfort. Most people would not put themselves through such mortification, but Black felt no discomposure. He was internally ‘judgement-proof’ emotionally as well as financially.

Friends asked why ‘Black’ singled me out to talk. Partly, people found it easy to chat with me, even confide, but also I could listen without hating him, which I suspect many of his colleagues and victims must have done. From him, of course, I heard only fragments of his exploits. He never mentioned the word ‘victims’, but hinted those who’d fallen for his schemes were weak-minded. He sometimes suggested when his prey rose up, they were unfairly trying to victimize him for being the more clever.

I can’t read a mind like his, but I began to suspect that if he dealt with emotions at all, he might have felt no wrong. He might even have believed himself entitled, that he had the right to exploit lesser humans, those who could not harm others. If so, I feel sorry for him. But I'll never know for sure.

A Sorry State of Affairs...

All right, I admit it, I'm running late on this blog, but I've been spending the last two weeks e-mailing my state legislators and governor over a variety of bills that seem to come straight out of the minds of ALEC. (Look it up.  Also, here:  SD Legislators with ALEC ties.) You see, we only have a 2-month legislature, that only sits 38 working days, so if I don't express my opinions now, I won't have time later on. Seriously - the session is going to end March 11. (Veto Day is March 29.)

First off, South Dakota is still officially missing $120 million dollars in EB-5 fees and investments, $14 million dollars spent (somewhere) of Gear Up! federal money, 7 people dead, cell phones wiped by the managing company the morning after an arson/murders/suicide (maybe), and a safe that had legs like a dog and walked out the door in the middle of the night. So, what's on our legislature's minds? Transgender potties and single women.

There's also House Joint Resolution 1002, which wants a new Constitutional Convention to propose “amendments to the Constitution of the United States that impose fiscal restraints on the federal government, limit the power and jurisdiction of the federal government, and limit the terms of office for its officials and members of Congress.” That'll fly.

Meanwhile, we're last in the nation for teacher pay, and our legislature is trying desperately, DESPERATELY to not put into action Governor Daugaard's proposal to increase sales tax by 1/2 of a cent to pay for increases. My favorite excuses are (1) that they haven't had time to read the bill and (2) that they haven't had time to come up with an alternate funding proposal. They've known about this since December. This is called kicking the can so far down the road that maybe it will disappear. At one point the House rejected it. Finally, though, late yesterday, through sheer shaming by most of us citizenry, it passed. We will no longer be 50th.

Wild Bill Janklow

There was also HB 1161, which would preemptively render useless an intiative that we the people are planning on voting on in November to rein in payday loans. South Dakota is, in case you don't know it, the usury capital of the country, thanks to the 1978 SCOTUS ruling in Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp, which (summed up) says that your individual state anti-usury laws cannot be enforced against nationally chartered banks located out of state. Our then governor, "Wild Bill" Janklow, heard that and persuaded the legislature to pass a bill that repealed South Dakota's cap on interest rates. And so Citibank, Wells Fargo, and other institutions moved here and life is sweet.

My favorite bill was HB 1107, which was "to ensure government nondiscrimination in matters of religious beliefs and moral convictions," as long as their religious beliefs and moral convictions were the following:

The Compound, West River in Pringle, South Dakota

1. Marriage is or should only be recognized as the union of one man and one woman;
2. Sexual relations are properly reserved to marriage; or
3. The terms male or man and female or woman refer to distinct and immutable biological sexes that are determined by anatomy and genetics by the time of birth.

(I have yet to determine why we apparently have religious beliefs and moral convictions about sex: what about usury? war? violence? lying? greed?)

Anyway, one of the great ironies of this bill is that at least one of the sponsors was an unmarried man who posted pictures of himself and his hot girlfriend all over social media. (It's a small state: you can find these things out.) I wrote many of my legislators about this bill, but my first question wasn't the obvious, "And were you a virgin on your wedding night?" Instead, it was, "Does this mean you guys are finally going to take on the polygamous sects living in compounds out West River?" (No one answered that question.) I also pointed out that birth anatomy and birth genetics can be entirely different (I used to work at Medical Genetics - see my blog post here (Medical Genetics). Everyone assured me that this was a non-discriminatory bill, to which I replied, politely, "Bull hockey." This bill has been - thankfully - tabled. Hopefully it will stay that way.

NEWS FLASH: The feds have actually taken on the polygamous sect led by Warren Jeffs' brother Seth in Pringle, South Dakota over food stamp fraud! Huzzah! Federal Probe Shows Details of Polygamous Sect. BTW, to those who don't know, the way these polygamous sects get around the laws against polygamy is by having "spiritual" marriages, which are not registered anywhere. The women - usually child brides, with no power of refusal - are then registered for food stamps, etc., as single mothers. Sadly, most of their sons are booted out of the compound as soon as they get to puberty, because there aren't enough brides to go around, since the old men are marrying all the daughters as soon as they hit puberty. Now you know why I asked about that...

But the one that's taken up most of my writing time is the transgender potty bill, which would would prohibit public school students from using a bathroom or locker room for a sex other than theirs at birth. (We really made the national news with that one. Sigh.) It passed the House, it passed the Senate, and now it's on Governor Daugaard's desk. I've been writing him almost every day, with at least one of the following arguments:

1. Transgender people don't want to do anything but use the bathroom safely. A boy who is transgendering to a girl doesn't want to assault girls, he wants to become one. A girl who is transgendering to a boy doesn't want to assault boys, she wants to become one.
2. Every student I've talked to doesn't understand what all the fuss is about. They all know some transgender students and have no problem with them using whichever bathroom they're comfortable in. (Bathrooms have stalls, with doors that lock.)
3. Gender is something that is not obvious, and is not always determined at birth. (See my Medical Genetics article link above.)
4. There is one bathroom which everyone uses - old and young, straight and gay, male and female, adults and children - and no one is worried about assault or trauma or shock: it's the one in your home. You go in, and shut the door.

The latest one - and I'm about to start writing my legislators on as soon as I finish this blog - is SB 159, which gives insurance companies credits on their premium and annuity taxes for granting “scholarships” for private K-12 school tuition to low-income students. The fun part of this is that the legislator who sponsored this bill is married to (who'd a thunk it?) the founder and owner since 1972 of an insurance company, and was past president of the Sioux Falls Catholic Schools Foundation, and past chairman of Advanced Gifts for the O’Gorman High School Building Funding Drive. Great joy in the morning, who could possibly think there was any conflict of interest?

What's especially irritating about all of this is that we're a relatively poor state; we are, as I said, ranked last in the nation for teacher pay. Governor Daugaard just refused to expand Medicaid again, after he said he would ONLY if the feds will move all Native American healthcare to their dime. Well, the feds did, and now Daugaard announced today that South Dakota still "can't afford" to expand Medicaid - keep kicking that can. Our infrastructure and roads are constantly crumbling (we have hard winters), and, as I said, we have over $120 million missing in taxpayer funds on scandals and corruption. But, rather than deal with any of these problems, our legislature keeps trying to pass bills that will only lead to lawsuits. Apparently, we have plenty of money for those. Not for investigating things that are really and truly affecting us right now.

Anyway, that's the latest update from South Dakota, were we talk like Mayberry, act like Goodfellas, and the crazy just keeps on coming.



NOTE: Huzzah! Daugaard vetoed the transgender potty bill!

The Chinese Are Coming!

A while back I wrote a column called "A Little Light Corruption"  about how South Dakota looks like Mayberry and acts like Goodfellas.  The body count is still only at seven (thank God), but the money is getting weirder by the minute.
For one thing, 35 Chinese investors are suing the State of South Dakota for $18,550,000, claiming they got ripped off in the EB-5 (green cards for a $500,000 investment) program.

And Joop Bollen (a Dutch foreign national), who somehow was allowed by our own then-Governor Mike Rounds (currently our US Senator) and our current Attorney General Marty Jackley, to privatize EB-5 and turn it over to himself via his own corporation (SDRC, Inc.) is now suing the State for defamation of character.

And our AG, instead of issuing warrants, is asking the court to freeze Joop's assets which are, in one bank account, around a million dollars.

NOTE:  Remember, originally, AG Jackley determined that the only "misappropriated" funds from EB-5 was the $500,000 that Richard Benda supposedly stole before supposedly killing himself in a field.  Apparently things have changed.  Although Marty Jackley is keeping as quiet as a tomb.

Joop Bollen and then-Governor,
current SD Senator, Mike Rounds

SECOND NOTE:  Mr. Bollen has, throughout, been treated with kid gloves.  He's never even been subpoenaed.  But the State of South Dakota has finally sued his corporation, SDRC, Inc... for documents.  Like, before they're shredded. 

THIRD NOTE:  Despite the Chinese investor losses, and Mr. Bollen's interesting bank account, South Dakota is still officially missing $120 million dollars in EB-5 fees and investments.  Where did it go?  Well, the state deficit in the last year of Mike Rounds' governorship was $120 million, so it didn't go there...  

Repeat after me:  "Life is always going to be stranger than fiction, because fiction has to be convincing, and life doesn't." Author Neil Gaiman.

Okay, on to GEAR UP!  Because we can't have just one major scandal about disappearing federal grant dollars in our tiny state.

A whole lot of  money (almost $3.5 million in 2011) went to a whole lot of people, except that almost none of it went to what the purpose of the grant was:  to give scholarships and education to Native Americans.  In fact, while 50-75% of all GEAR UP funds were supposed to be spent on scholarships according to the federal grant requirements, South Dakota requested (and apparently got) a waiver to spend NO money on scholarships, but to spend 100 percent of the grant on college preparedness and college readiness. And of course the best way to prepare Native American students for college was to hire endless consultants and directors of various sub-corporations.  (Angela Kennecke investigation)  The result is, $14 million dollars spent (somewhere), and 20 people went to college.   As my blogger friend Cory says, wouldn't it have been cheaper just to give the kids scholarships?  (dakotafreepress.com/2015/12/31/)


Some of you may remember from my last post on this that the Westerhuis' cell phones were cancelled the day after the arson / murder / suicides, and all the records were wiped, including who made a call and left a voice mail about 20 minutes before the fire.  As it turns out, the Westerhuis cell phones were through the Mid-Central Educational Cooperative (MCEC, the hub corporation for GEAR UP money, and for which the deceased Westerhuises worked). And it was MCEC that cancelled the phones and had the records wiped.  No explanation why they would do this before the ashes had even cooled on the ground...

And you may also remember that there was a missing safe, which apparently had legs like a dog and got up and trotted off because it hasn't been found yet.

From the "It can't get any weirder than this" files:

Governor Dugaard and Secretary of Education Melody Schopp
at the Interview

The US Department of Education tells KELOLAND News that in 2014, the South Dakota GEAR UP State grant file was destroyed and none of the documents are available.  (More Angela Kennecke investigation)

When KELO-TV investigative reporter Angela Kennecke asked for an interview with Secretary of Education Melody Schopp about GEAR UP and MCEC, she was told by the governor's office that she could only talk to Schopp with Governor Dugaard present. (see photo to the right)  Still trying to figure out whose hand needed holding...

And the Mid-Central Educational Cooperative had a forensic audit of their books, and presented it to a public meeting of the MCEC board. Said the auditors:  “We did not have access to financial records or other information from any other business or individuals.”  (For example, any of the multiple organizations that the deceased Mr. Westerhuis set up.)  And neither MCEC board members, nor the public, nor the media were allowed to ask any questions or even speak at the public meeting.  (http://dakotafreepress.com/?s=audit)

Just another day in South Dakota, where federal grant money can disappear like magic.

Did I mention that 4 in every 10 dollars in South Dakota revenue come from the federal government? (10 States most dependent on Federal Government)

Repeat after me:  "Life is always going to be stranger than fiction, because fiction has to be convincing, and life doesn't." Author Neil Gaiman.

A Little Light Corruption

By gum, we folks in South Dakota really know how to keep things quiet.  Until someone dies, and then the whole thing comes boiling out.  Mayberry it isn't.

2013-2014

October 20, 2013 - Richard Benda was found dead from a shotgun wound to the stomach in a field in October.  The SD Attorney General, Marty Jackley, instantly ruled it a suicide.  Came out shortly thereafter that Benda had, apparently, embezzled pots of money from the EB-5 program, an immigration program set up by George H.W. Bush in 1990 that grants Visas to foreign investors for a minimum $500,000.00 investment. Quick money for the state, quick green card, and everything's hunky-dory.

Now Richard Benda was the former commissioner of then Governor Mike Rounds' Office of Economic Development. (Rounds is currently one of our two State Senators, the other being John Thune.)  He was also the one-time financial monitor of the Northern Beef Packers of Aberdeen, a $100 million slaughterhouse, funded largely by Asian EB-5 investors, which later was auctioned off in December, 2013 for $4.8 million in cash and $39.5 million in the cancellation of what's been called a “somewhat murky debt." Benda was soon accused of stealing $500,000 and "amending" grant proposals to give Northern Beef Packers more money. AG Jackley has refused to release the autopsy of Mr. Benda ("out of respect for the family"); and in July of 2014, after 9 months of increasing stink, Jackley waved a document in front of news cameras that he claimed were the indictments for Aggravated Theft and Aggravated Grand Theft by Deception that were about to be served on Benda right before he killed himself/was murdered. (Take your pick; we all have.)

Like any good crime fiction writer, I looked at the documents and recognized the simple fact that, without a signature or notarization, these documents could have been typed up at any time, say the weekend before the Monday July news conference, when the crap was piling too deep to ignore any more.  And, as more and more people demanded answers, the SD legislative committee declared in December of 2014 that Richard Benda was solely responsible for the $500,000 embezzlement and probably the loss of millions of dollars (last report, $140 million, but who's counting), but no one knows where that money went, and they were not going to investigate further.  They were especially not going to investigate a man named Joop Bollen, a Dutch foreign national who ran the EB-5 program for Governor Rounds and later set up his own private corporation, SDRC, which took over administration of the EB-5 program.  Mr. Bollen was asked some questions by the SD legislative committee, but was allowed to answer them in writing, and never had to appear.  He has never been charged with anything.  Anything at all...

But wait, there's more!  I've been on vacation, and while I was gone, the Feds, yes, the Feds! have decided that South Dakota is too corrupt to use EB-5 funds, and we are barred, yes, BARRED, from every getting EB-5 money again.  Plus, they're suing South Dakota:
http://dakotafreepress.com/2015/10/18/feds-say-south-dakota-too-corrupt-to-use-eb-5/
http://www.mitchellrepublic.com/news/state/3863619-feds-aim-kick-sd-out-eb-5-program-state-sues-bollens-records
And, at last, the State of South Dakota is going to sue Mr. Bollen.  Like there's any money left...

Meanwhile, there's a whole new bit of nasty coming out from under the rocks:

2015

Late at night on September 17, 2015, a fire destroyed the home of Scott and Nicole Westerhuis and their four children in Platte, South Dakota.  It wasn't until a few days later that it turned out that all six had been shot to death.  SD Attorney General Marty Jackley declared it a murder/suicide/arson, perpetrated by Scott Westerhuis.  The only question was why.  Now, I'm writing this in early October, and this is only going to get messier.

Scott Westerhuis was the business manager of MCEC, the Mid Central Educational Cooperative, which is, among other things, a hub for distributing federal grand monies to other non-profit organizations.  One of these was South Dakota Gear Up, whose website was taken down after all the employees were fired...  Well, here's the deal, Gear Up received a $4.3 million dollar contract to help get Native American kids into college. On September 16, 2015, Department of Education terminated the contract after an audit declared bad reporting, bad accounting, and general bad books. On September 17, the Westerhuis family tragedy occurred.  On September 25, State Education Secretary Melody Schopp fired every surviving employee of Gear Up, and shut down the Gear Up website.

36705 279th Street, Platte, SD.
screen cap from Google Maps,
2015.09.22.

But wait, there's more! The Westerhuis family lived on a $1.3 million rural Platte property that included a 7,600 square foot house, a $900,000 gym complete with basketball court, weight-lifting area, and computers, and a loft with a meeting room, rooms for guests, and a kitchen.  This was on an official combined MCEC salary of $130,549.82.

But wait, there's more! Scott Westerhuis set up as many as 7 non-profit corporations related to Indian education:




Some are inactive, but Rock Ranch Consulting, which has no easily identifiable online presence, may refer to the Westerhuises’ rock-decorated rural home, torched on September 17. Rock Ranch Consulting was the source of incorporation funds for “American Indian Institute For Innovation and Excellance,” [sic], whose 2014 Form 990 shows $2.7 million in revenue and $3.0 million in expenses, including $1.58 million in salaries and wages, $311K in pension and benefits, and $270K in travel, conferences, and meetings. Apparently very little education of Native Americans actually happened. And there's Oceti Sakowin Education Consortium (OSEC), formed in 2011 and still in good standing, whose 2013 Form 990, completed by Nicole Westerhuis on November 6, 2014, shows $965K in revenue and $935K in expenses. Scott Westerhuis was incorporator of all of these, and his wife Nicole was business manager of at least some of them.
(Thanks to Corey Allen Heidelberger for his incomparable fact-finding on Dakota Free Press: http://dakotafreepress.com/tag/mid-central-educational-cooperative/ )

But wait, there's more! We are just now cracking (again, thanks, Corey!) the list of high-level education professionals who received significant monthly and annual payments ($150,000+ in some cases) for consulting and administration from Gear Up and/or MCEC, and are scrambling to cover their assets, er, what they did and when and why.  My two favorites:

1. Dr. Joseph Graves, Mitchell, SD School Superintendent, received his money from the MCEC for the Teaching American History federal grant; what makes this especially sweet is that the South Dakota Board of Education has made teaching early American history optional in South Dakota.  
2. Dr. Rick Melmer, the Dean of Education of the University of South Dakota, who simply couldn't remember nine $1,000 in payments live on South Dakota television:  http://www.keloland.com/newsdetail.cfm/melmer-answers-questions-about-gear-up-work/?id=185508   You really can't make this stuff up.  (I don't know about you but I've never forgotten a single thousand dollar check I've ever gotten in my life, much less nine of them...)

Governor Dugaard

Now I could go on into a tirade about South Dakota mismanagement of federal grant monies, i.e., the political cronies slurping on the federal gravy train.  (Meanwhile our distinguished Governor Dugaard refuses to expand Medicaid coverage because the feds might not have the money:  note to Gov - if so, it's because your pals have siphoned it all off to build large gyms.) Or I could discuss the shameful use of Native Americans to get grant monies.  I have, I will, and I will again.

I will go off, for a moment, again, on the fact that South Dakota has been ranked #2 for government corruption.  (New Jersey, eat your heart out!)  How can this be? Simple:  South Dakota is a one-party state:  the Governor is Republican, the GOP has a super-majority in the legislature, the districts are gerrymandered so that Republicans consistently keep their super-majority (this is especially farcical when you see the little corridor linking the entire Rosebud Reservation, votes 90% Democratic, to staunch Republican Pennington County, a/k/a Rapid City).  It helps that Pierre, our capital, is one of the few US state capitals which is not on a major interstate - it's literally out in the middle of nowhere - and there is no major news media located there.  This helps ensure that whatever happens in Pierre, stays in Pierre.

Until someone dies.  And the death toll is starting to rise.

Meanwhile, why does hell always break loose in autumn?  

I'll keep you posted.  

There was a Crooked Village

Little Stomping

Picture a village whose reason for being is a criminal enterprise. Imagine its entire raison d’être, its very existence hinges upon fleecing the public. Typical of such towns, as many as one in fifteen to twenty of residents– men, women, children and chickens– are part of its politico-judicial machinery: crooked cops, municipal machinators, and corrupt clerks.

And not ordinary crooked cops, but heavily armed with the latest in high-power assault weaponry and shiny pursuit vehicles. Police– poorly trained but still police– yet some may not have been certified officers at all. One fancied himself Rambo and stopped tourists with an AR-15 slung across his chest like that inbred couple in Open Carry Texas.

Village authorities arbitrarily moved town limit signs beyond the actual town’s boundaries in a bid to increase exposure to radar patrol… and revenues. When cops sat in lawn chairs aiming their radar guns and sipping from their open containers, they turned a blind eye to the citizens who dried their marijuana in the convenience store’s microwave. Oh, and those shiny police cars? The town often didn’t bother to insure them, this in a village where the police department wrote more tickets than Fort Lauderdale but still outspent its budget.

First of three speed traps in
a 20 mile stretch of US 301.
AAA believed to sponsor sign.

Speed Trap

Set this supposition aside for the moment.

When I was a kid who couldn't yet drive, a short story left an impression on me. The plot centered around a man traveling to Florida who was caught in a small town speed trap. The police tossed him in jail.

Andy Griffith they weren't: they kept him imprisoned as the authorities systematically drained his assets like a spider sucks juices from a fly. Who do you turn to when the law is corrupt?

Florida sunshine has always attracted northerners during the icy winter months. In the first half of the 20^th century, snowbirds filtered south through the highways and byways of America. Before the 1950s, towns and villages in the arteries of early tourism discovered they could make money fleecing tourists  passing through their area.

Lawtey, Hampton, Waldo speed traps

 

US 301: Jacksonville ↔ Gainesville
Atlantic at right, Georgia border at top

Some places in the Deep South considered northern travelers carpetbaggers and therefore fair game. Even so, town fathers and others found it easy to offset moral compunctions when considering the sheer profit involved. Could they help it if a Yankee ran a stop sign obscured by tree branches or failed to notice the speed limit abruptly changed from 55 to 25?

Where’s Waldo?

In the tiny towns of Lawtey, Hampton, and Waldo, that’s exactly what happens as the speed limits bounce every block or so from 55 to 30 to 45 to 25 and back again. If you have the time and patience, you might try locking your cruise control in at 25mph, hoping to beat the system. But they have an answer for that too– tickets for failing to maintain a safe speed.

In the early 1990s, it dawned on Hampton that nearby US 301 was an untapped piggy bank with the emphasis on piggy. The highway had been a source of resentment when it passed within a few hundred metres of the town limits, but devious minds found a way to make the road pay. The village annexed a strip of land 420 yards (384 metres) along the federal highway and began hiring candidates for police officers. Hampton’s speed trap was born.
(See maps below.)

In a state with a governor who committed the largest Medicare/Medicaid fraud in history, it takes a lot to outrage the Florida Legislature, but over time, Hampton succeeded. Their downfall started when they had the audacity to ticket State Representative Charles van Zant. Thanks to him, Florida lawmakers drew up plans to revoke the city's charter and revert the village to an unincorporated plat of county land.

Hampton with annex

Hampton

The events that set Hampton above (or below?) its speed trap neighbors, Lawtey and Waldo, is the corruption that took place off the highway. The village can’t account for monies in the high six-figures while at the same time failing to provide basic maintenance and repairs. Under one free-spending family that ‘managed’ the little city, it ran up large debts at local stores and on the municipal credit card.

While the town failed to properly bill residents for the water utility, the clerk collected cash– Sorry, no receipts. The water department can’t reconcile nearly half of the water actually distributed, telling auditors the records were “lost in a swamp.” And if residents complained about inefficiency and corruption, their water supply was cut off altogether, prompting Bradford County Sheriff Gordon Smith to refer to the situation as “Gestapo in Hampton.”

As CNN suggested, the town became too corrupt even for Florida to stomach. State and federal auditors agreed and wheels started turning to unincorporate the town and strip it of its charter. The road to perdition seemed inevitable.

Road to Recovery

But not everyone saw it that way. Once corrupt authorities slunk back into the shadows, good citizens of Hampton stepped forward. A former clerk took over the reins. A new resident made plans to run for mayor, replacing the current mayor who resigned from his jail cell. Volunteers put together a plan to bring the town into compliance and moreover, they acted upon it. Among other things, the town plans to de-annex the strip of land encompassing US 301 although the ‘handle’ part of the town’s griddle shape will remain.

At present, efforts to revoke the town’s charter remain in abeyance and it looks like the town may have saved itself. We can only wish legislators had the political gumption to rid the state of speed traps altogether in places like Waldo, Lawtey, and Windemere.

Short Story Bonus

And, in case you were wondering, Jacksonville is probably not named after Shirley Jackson, despite her [in]famous short story about a small town. Read it on-line | download eBook PDF | download audiobook.