Authorities say the couple used the nonprofit American Indian Institute for Innovation, where they had fiscal oversight, to embezzle money from their employer, Mid-Central Educational Cooperative.
SIOUX FALLS, S.D. (AP) – A dead South Dakota couple who had financial oversight over a nonprofit aimed at helping Native American students allegedly took money from the organization to save up for their own children's educations, recently filed civil court documents reveal.
The new litigation offers more details about Scott and Nicole Westerhuis' spending before their September murder-suicide, which launched a financial investigation surrounding the GEAR UP program that unearthed theft authorities believe could top $1 million.
Authorities say the couple used the nonprofit American Indian Institute for Innovation, where they had fiscal oversight, to embezzle money from their employer, Mid-Central Educational Cooperative. While working at the Institute, Scott Westerhuis used a secretly obtained American Express card to make monthly purchases with the nonprofit's money for his family, according to the civil documents.
The filings say there were other “inappropriate” purchases using a debit card linked to the Institute's checking account, as well as through Paypal, Amazon and payments into an education savings plan for the Westerhuis' children.
The documents don't detail how much of the Institute's money went to the purchases, but say that Scott and Nicole Westerhuis intended to deceive the organization. The Institute is seeking damages from the estates of Scott and Nicole Westerhuis.
Three current or former Mid-Central employees have been indicted on felony charges stemming from the investigation prompted after Scott Westerhuis shot his wife and their four children before setting fire to their house near Platte and killing himself.
The Westerhuis deaths occurred just hours after the state informed Mid-Central it was losing a contract for GEAR UP – a federal program aimed at helping high-poverty middle and high school students prepare for college – because of financial problems and accounting failures.
Court documents from the criminal investigation say the couple took money from Mid-Central's bank account without authorization to fund the Institute's payroll. At the end of November 2015, the Institute owed Mid-Central as much as $826,000 for payroll, according to a filing.
Scott and Nicole Westerhuis also wrote checks to themselves from the Institute's bank account for their own use, according a court affidavit. Attorney General Marty Jackley has said they spent at least part of the money on home improvement projects.
The two initially tried to hide the alleged illegal activity that started as early as 2010, but became more brazen near the time of the September 2015 fire, according to a court document.