Pamela Dellis of Lindstrom said her gambling addiction led to a five-year scheme to defraud the state out of nearly $2 million. She was sentenced to five years in prison.
The architect of a scheme to defraud Minnesotans out of nearly $2 million was sentenced to five years in federal prison Wednesday.
Pamela Dellis, a former auditor for the Minnesota Department of Revenue, said a gambling addiction caused her to concoct a scheme that involved creating more than 200 phony state tax refunds. Dellis enlisted her sister and niece to help with the fraud that lasted nearly five years.
All three had pleaded guilty earlier. Dellis, 58, of Lindstrom, admitted to conspiracy to commit mail fraud and money laundering. Nancy Sondrall, 55, of Brooklyn Center, and Laurie Sondrall, 29, of Minneapolis, each pleaded guilty to conspiracy to commit mail fraud.
U.S. District Judge Joan Ericksen last month sentenced Laurie Sondrall to more than two years behind bars. Nancy Sondrall is awaiting sentencing.
Despite pleas for a lesser sentence from Dellis' attorney, Ericksen said she was mindful of the need for the public to have confidence that public officials who steal will be held accountable.
"This is a serious and shocking violation of the public trust," Ericksen said.
Dellis' job as an auditor was, in part, to process legitimate tax overpayments. She had been with the Minnesota Department of Revenue since September 1981.
State Revenue Commissioner Myron Frans testified at the sentencing. He said Dellis' crime demoralized revenue employees and eroded the public's trust in the department.
"We will hold any employee who engages in criminal activities accountable for abuse of public trust and funds," Frans said.
He said the Department of Revenue has taken steps to protect taxpayers from the type of inside job Dellis got away with for years, including moving to a new integrated tax system and instituting new approval requirements for manual refunds.
Later Wednesday, state officials announced that Mike Turner has been named to the new post of agency internal audit manager. The position is meant to improve quality and efficiency while reducing costs. Frans acknowledged the position is, in part, a response to Dellis' ability to elude detection for so long.
Turner will join the revenue department on Sept. 28 and report directly to Frans.
James Walsh • 612-673-7428