Ex-Minnesota revenue auditor charged in $1.9 million theft
A former auditor with the Minnesota Department of Revenue whose job it was to get refunds to taxpayers instead stands accused of creating nearly $2 million in bogus refunds that she split with her sister and niece.
Pamela Marie Dellis, 58, of Lindstrom, Minn., was charged in federal court Friday with one count of conspiracy to commit mail fraud and one count of money laundering in the alleged scheme.
Dellis' job as an auditor was, in part, to process legitimate tax overpayments. But she allegedly created more than 200 false refunds -- in the form of checks and electronic funds transfers -- worth more than $1.9 million that she then had sent to her sister and niece.
Dellis' sister, Nancy T. Sondrall, 55, of Brooklyn Center, and her niece, Laurie R. Sondrall, 28, of Minneapolis, were charged with conspiracy to commit mail fraud for their alleged roles in the scheme.
State records show that Dellis was first hired by the Minnesota Department of Revenue in September 1981. The alleged scheme took place from before Jan. 12, 2005, through Sept. 17, 2010, according to the charges.
Gov. Mark Dayton issued a statement Friday that addressed the charges, saying: "If true, this serious charge constitutes a breach of the public trust, and is completely unacceptable."
He added that in addition to the ongoing state investigation and federal criminal action, "I am requesting the legislative auditor undertake a detailed examination of the department's internal controls to ensure that this kind of criminal fraud against the state of Minnesota cannot be committed again.
"I am mindful of the warnings the legislative auditor has issued previously that the management of certain state agencies lacks the necessary oversight and controls to prevent the misuse of public money. The people of Minnesota deserve accountability and vigorous oversight of our taxpayer dollars."
The three women were charged in what is called a felony information. Suspects charged by information are usually cooperating with authorities and are expected to eventually plead guilty.
'Favorable resolution' ahead?
Craig Cascarano, a Minneapolis attorney representing the women, did not go into detail about the case Friday afternoon. He said he has been "in open discussion for a lengthy period of time with the U.S. attorney's office" regarding the case.
He added that Friday's public announcement of the charges against Dellis and the Sondralls is "the first step of a highly favorable resolution to all three defendants."
According to the charges, Dellis reportedly concocted false entries and records at the Department of Revenue to create the impression that fictitious taxpayers were owed refunds. She then allegedly used variations of her sister's and niece's names to create refund checks and transfers -- all to make the scheme more difficult to detect.
Sometimes, Dellis and her co-conspirators would meet at a check-cashing business where they would cash the check and share the proceeds, investigators say. On other occasions, Dellis allegedly had the money deposited into a bank account that her sister and niece could withdraw from and share the money with her later.
If convicted, Dellis faces a potential maximum penalty of 25 years in prison on the money laundering charge and five years on the conspiracy charge. The other defendants face five years in prison for conspiracy. If they are convicted, a federal judge will set their sentences at a later date.
A check of state criminal records for Dellis and Nancy Sondrall found no convictions in Minnesota. Records show that Laurie Sondrall has a July 2006 DWI conviction.
Phone messages left with Nancy and Laurie Sondrall were not immediately returned. Contact information for Dellis could not be found.