Sisseton Wahpeton man acquitted in Indian education theft case

Friday, October 12, 2018

Stacy Phelps, a citizen of the Sisseton Wahpeton Oyate, has been cleared by a jury in connection with an Indian education funding scandal in South Dakota.

Phelps, 45, had been charged with falsification of evidence and conspiracy to offer forged or fraudulent evidence. The state alleged that he backdated contracts in order to cover up the theft of $1 million from GEAR UP, a federal program that is designed to help Indian and low-income students.

But the jury didn't buy the case. After deliberating for several hours on Thursday, the members found Phelps not guilty, according to news reports.

"We've always maintained his innocence and we proved it," attorney Dana Hanna told The Sioux Falls Argus Leader.

Phelps had served as chief executive officer of the American Indian Institute for Innovation. The organization itself was not directly accused of stealing $1 million from the GEAR UP program.

Instead, authorities believe the founder of Mid-Central Educational Cooperative, which had contracts with Phelps's organization, stole the funds. Scott Westerhuis, however, can't be held accountable because he committed suicide after shooting and killing his wife and their four children in September 2016.

Two others had been charged in connection with the allege coverup. Stephanie Hubers was acquitted of grand theft in June, The Sioux Falls Argus Leader reported. Dan Guericke pleaded guilty to a charge of falsification of evidence last month, the paper said.

The state shut down the GEAR UP program in 2015 after questions about Mid-Central Educational Cooperative's spending surfaced, Lakota Country Times reported.