South Dakota AG and US Attorney Announce Initiatives to Combat Government Fraud

AG: South Dakota Press Releases

Published March 26th, 2026

Detected March 27th, 2026

Summary

The South Dakota Attorney General's Office and the U.S. Attorney's Office for South Dakota announced new federal and state initiatives to combat government fraud. These efforts aim to protect taxpayer dollars and prosecute offenders stealing from state, federal, or tribal governments.

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What changed

The South Dakota Attorney General's Office, in conjunction with the U.S. Attorney's Office for South Dakota, has announced a joint initiative to combat fraud against government entities. This initiative involves enhanced cooperation between state and federal law enforcement agencies to detect, investigate, and prosecute fraudulent activities that target state, federal, and tribal governments. The announcement highlights the significant financial losses incurred annually due to government fraud, citing figures from the Government Accountability Office and emphasizing that offenders will be held accountable.

Compliance officers should be aware of increased scrutiny and enforcement actions related to government programs and contracts. While this announcement does not introduce new specific regulations, it signals a heightened focus on fraud detection and prosecution. Entities that interact with government funds or programs should review their internal controls and compliance procedures to ensure adherence to anti-fraud measures and be prepared for potential investigations. Reporting mechanisms for suspected fraud are also emphasized, suggesting that tips from employees and citizens are crucial in initiating investigations.

What to do next

Review internal controls for government contracts and programs.
Ensure compliance with anti-fraud measures.
Be prepared for potential investigations into fraudulent activities.

Penalties

Offenders who steal from state, federal, or tribal governments will be held accountable.

Source document (simplified)

Attorney General Marty Jackley

A TTORNEY OFFICE OF THE
SOUTH DAKOTA G ENERAL

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U.S. Attorney’s Office and South Dakota Attorney General’s Office Hold Joint Press Conference on Combating Government Fraud
FOR IMMEDIATE RELEASE
Contact: Kailene Frey
Date: March 26, 2026
Acting Public Affairs Officer
DSD.gov | @DSDnews1
usasd.press@usdoj.gov
U.S. Attorney’s Office and South Dakota Attorney General’s Office Hold Joint Press Conference on Combating Government Fraud
SIOUX FALLS - United States Attorney Ron Parsons and South Dakota Attorney General Marty J. Jackley held a joint press conference at the Sioux Falls Police Department on Thursday, March 26, 2026, to highlight new federal and state initiatives to combat the serious problem of fraud committed against state and federal governments and government programs.
The U.S. Attorney’s Office and South Dakota Attorney General’s Office are working together toward the same goals: protecting taxpayer dollars, ensuring government program funding goes to the people in need of assistance, and prosecuting those who steal from state, federal, or tribal governments. Alongside law enforcement and agency partners, the U.S. Attorney’s Office and South Dakota Attorney General’s Office work together to detect, root out, and prosecute fraudulent conduct. Tips and leads from employees, contractors, and concerned citizens are often how fraud is first discovered.
“Fraud is not a mistake. It is not a technicality. It is not just ‘gaming the system.’ And it is not victimless. It is stealing. And those who steal from the American taxpayer will be held accountable,” said U.S. Attorney Parsons.
“South Dakotans deserve a state government that is transparent and free from corruption,” said Attorney General Jackley. “I have and will hold offenders accountable.”
NATIONAL CONTEXT: THE SCALE OF THE PROBLEM
According to the Government Accountability Office (GAO), the federal government loses an estimated $233 billion to $521 billion every year to fraud — representing 3% to 7% of total federal spending. Since 2003, cumulative improper payments have totaled approximately $2.8 trillion. In fiscal year 2024 alone, 16 federal agencies reported $162 billion in improper payments across 68 programs.
The federal multi-agency crackdown on benefit fraud in Minnesota—which resulted in charges against 98 defendants and 64 convictions to date—demonstrated the effectiveness of coordinated enforcement across multiple agencies. The new national DOJ Fraud Enforcement Division created under the Trump Administration is modeled on that effort and dedicated to combating fraud—both criminal and civil—in every federal program, in every state. On March 24, 2026, Assistant Attorney General Colin McDonald was confirmed by the United States Senate to lead that division.
THE USAO’S NEW GOVERNMENT FRAUD UNIT
Recently, the United States Attorney’s Office for the District of South Dakota established a Government Fraud Unit to integrate civil and criminal prosecutors from the outset of every case involving government fraud. This unit facilitates the simultaneous pursuit of criminal charges and civil remedies, including recovery under the False Claims Act, which allows the government to seek treble damages for fraud against federal programs. The Unit’s focus areas include:
• Healthcare fraud (Medicare, Medicaid, and federal health programs)
• Procurement and grant fraud
• False Claims Act violations
• Theft from tribal programs and organizations
• Financial fraud against federal programs of every kind
The USAO Government Fraud Unit in South Dakota will work closely and coordinate with the new Fraud Enforcement Division at the Department of Justice in Washington, D.C.
SOUTH DAKOTA ATTORNEY GENERAL’S OFFICE PROGRAMS
Attorney General Marty Jackley has three programs that promote government accountability within South Dakota: the Public Integrity Unit, Medicaid Fraud Abuse and Neglect Services, and Cooperative Disability Investigations.
South Dakota’s Public Integrity Unit was established through Senate Bill 62, which was proposed by Attorney General Jackley, passed by the 2025 Legislature, and signed by Governor Larry Rhoden. The legislation created mandatory reporting requirements for state employee misconduct and provided protection for employees who make good faith reports to authorities.
In its first year, the unit received 58 reports that resulted in 16 investigations, nine substantiated allegations, and four individuals charged. A yearly report will be presented to the legislative Government Operations and Audit Committee. This year’s Public Integrity Report can be found at: https://atg.sd.gov/docs/January%202026%20Public%20Integrity%20Report%20to%20GOAC.pdf
Medicaid Fraud, Abuse and Neglect Services recovered $942,248.56 in 2025, while the office’s Cooperative Disability Investigations program was ranked the sixth most productive unit in the country for Fiscal Year 2025. The program recorded $4.5 million in Social Security Program Savings and $2.9 million in Medicaid/Medicare Program Savings.
“We will not tolerate fraud that steals from taxpayers,” said Attorney General Jackley. “Every dollar recovered is a dollar returned to the public.”
RECENT FEDERAL CASES IN SOUTH DAKOTA
Crop Insurance Fraud—Sully County (Criminal Convictions and Civil Judgment: $4,019,820)
Two Sully County farmers falsely certified to a federal crop insurance company that they had planted approximately 2,200 acres of sunflowers and corn that were never planted, then collected over $1.3 million in insurance payments. After criminal convictions in 2022, the government pursued civil remedies under the False Claims Act. In September 2025, a federal judge entered a civil judgment of $4,019,820 against the defendants. The case, which was investigated by the USDA Office of Inspector General and the USDA Risk Management Agency, demonstrates the USAO Fraud Unit’s integrated civil and criminal enforcement model.
Theft from Tribal Employment Office—Pine Ridge (Indicted: $4.7 Million+)
Two defendants were federally indicted for conspiring to divert over $4.7 million in employment fee checks from the Tribal Employment Rights Office (TERO) on the Pine Ridge Reservation into a private bank account over a seven-year period. The funds—meant to support tribal employment programs—were allegedly split between the two defendants and used for personal purchases including homes and vehicles. Both face charges of conspiracy to commit wire fraud, 22 counts of wire fraud, and 7 counts of money laundering, each carrying a maximum penalty of 20 years in federal prison. One defendant has pleaded guilty and is awaiting sentencing. The other has pleaded not guilty. The case was investigated by the FBI and HHS Office of Inspector General.
False Claims Act: Telecommunications contractors sued for defrauding Indian Tribe—Rosebud, SD ($2.1 Million+)
The owners and agents of a telecommunications company have been sued under the False Claims Act for allegedly making false claims for payment to the federal government to enrich themselves. A tribal government was awarded a federal grant to expand internet access on the reservation. The Tribe awarded the contract to complete the work to defendants, who then conspired to invoice the Tribe for equipment never purchased and to create fraudulent, inflated invoices for vehicles that were then charged to the federal grant. The claim is subject to treble damages under federal law. The case was investigated by the U.S. Department of Commerce, Office of Inspector General.
Tax Preparer Scheme for Submitting Fraudulent Tax Returns—Sioux Falls (Indicted: $685,437)
Working out of her Sioux Falls home, the defendant allegedly submitted fraudulent income tax returns on behalf of dozens of unwitting clients from approximately 2020 through 2023. The tax returns included a variety of falsely claimed items, such as Schedule A deductions and childcare tax credits, thereby inflating individual tax refunds. Defendant was indicted in January 2026 on 45 counts of Aiding and Assisting in the Preparation and Presentation of a False and Fraudulent Tax Return and faces a maximum penalty of three years on each count. The defendant has pleaded not guilty. The case was investigated by IRS-Criminal Investigation.
Superintendent Embezzlement, Bureau of Indian Education School—Pine Ridge (Indicted: $700,000)
The superintendent of a federally funded Bureau of Indian Education school on the Pine Ridge Reservation was indicted on charges of embezzlement and theft from a tribal organization, larceny, and theft of government property for allegedly stealing approximately $700,000 through multiple schemes. The school receives most of its operating budget from the federal government. The defendant has pleaded not guilty. Trial is scheduled for June 2026. Forfeiture proceedings are underway to recover stolen funds for the school and community. The case was investigated by the Department of Interior, Office of Inspector General.
RECENT STATE CASES IN SOUTH DAKOTA
Stealing from Children: Lonna Carroll, former DSS administrative assistant, was sentenced to seven years and ordered to repay $1.78 million for stealing from Child Protection Services between 2010 and 2023.
Exploiting Trust: Mark Rathbun, former state driver’s license examiner, faces an 85-count indictment for possession of child pornography and unlawful access of computer systems. Charges include using confidential driver’s license data and creating or sharing computer-generated pornographic images of minors. Rathbun’s case is pending. He is presumed innocent under the U.S. Constitution.
Falsifying Inspections: Renee Strong, former Department of Public Safety employee, was convicted for forging food service inspections.
Concealing Fraud: Danielle Degenstein, former Department of Revenue employee, was sentenced and fined for failing to report a colleague’s creation of fake vehicle titles.
Medicaid Fraud: Sharon Monson of Pierre was indicted on five felony charges for allegedly defrauding the South Dakota Medicaid Program of approximately $588,000. Monson, owner of At Home Nursing, faces charges including unlawful receipt of medical benefits, aggravated grand theft, perjury, and failure to maintain necessary records. The case is pending, and Monson is presumed innocent.
HOW TO REPORT FRAUD
Members of the public who have information about fraud against federal programs are encouraged to come forward. Reports can be made confidentially.
• U.S. Attorney's Office, District of South Dakota: (605) 330-4400 (Sioux Falls); (605)
224-5402 (Pierre); (605) 342-7822 (Rapid City) | www.justice.gov/usao-sd
• South Dakota Division of Criminal Investigation: (605) 773-3331
• FBI: tips.fbi.gov | 1-800-CALL-FBI
• USDA OIG (crop/food programs): 1-800-424-9121
• HHS OIG (Medicare/Medicaid): 1-800-HHS-TIPS
• GAO FraudNet: gao.gov/fraudnet | fraudnet@gao.gov | (800) 424-5454
Individuals with inside knowledge of fraud against the government may also be eligible to file a qui tam lawsuit under the False Claims Act and may receive between 15% and 30% of any government recovery. Federal law prohibits retaliation against whistleblowers.