Former MN Tax Auditor Admits to $1.9M Fraud Scheme
A former auditor for the Minnesota Department of Revenue on Monday admitted to creating false tax refunds and signing over fraudulent checks to her relatives, the proceeds of which they divided among themselves.
Pamela Marie Dellis, a 58-year-old woman from Lindstrom, pleaded guilty in U.S. District Court in Minneapolis to one count of conspiracy to commit mail fraud and one count of money laundering, the U.S. Attorney's Office in Minnesota announced Monday.
Dellis' sister, Nancy Sondrall, and niece, Laurie Sondrall-both from Minnesota-also pleaded guilty to one count of conspiracy for helping in Dellis' embezzling scheme.
Dellis and her relatives were charged in January for their alleged crimes.
Prosecutors accuse Dellis and her two accomplices of working together-from January 2005 through September 2010-to defraud the state out of $1.9 million through the creation of more than 200 false tax refunds.
Dellis, in her capacity as an auditor with the Department of Revenue, was responsible for processing tax overpayments. According to the U.S. Attorney's Office, Dellis admitted to falsifying records to imply that a taxpayer was owed a refund due to an overpayment. She then drafted refund checks made payable to her sister or niece for the refunds-which they sometimes cashed and split up among them. Other times, in an effort to conceal the fraud, they deposited the money into an account prior to withdrawing the funds.
According to a report by the Star Tribune, Dellis told the federal judge that she used the fraudulently received funds to feed her gambling addiction.
Dellis faces up to 25 years in prison for the money laundering charge and up to five years for the conspiracy charge. Her sister and niece each face a maximum sentence of five years in prison.
U.S. District Court Judge Joan N. Ericksen will determine the sentences at a future hearing, which has not yet been scheduled.