Federal indictments issued against five

By Joe Fafka
Pierre, South Dakota (AP) 6-08

U.S. Attorney Marty Jackley said May 28 that five people have been indicted on charges involving a scheme to steal federal funds intended for reconstruction of a school that was partially destroyed by fire at Stephan in 2005.

Included among the defendants is the former top official of Crow Creek Tribal Schools.

Charged in connection with the 55-count federal indictment are Edwin Lee Patzer, 61, of Pierre; Scott Raue, 42, of Fort Pierre; John Nystrom, 53, of Pierre; Patsy Hawk, 50, of Mission; and Brady Hastings, 47, of Huron.

Raue was superintendent and chief executive of the tribal school system from 1998-2006, and Nystrom is an electrical contractor, Jackley said.

The indictments involve theft, bribery, fraud and money laundering, the U.S. attorney said.

Raue, Nystrom, Hawk and Hastings pleaded not guilty May 27.

Raue was indicted on two counts of theft and bribery, and one count of money laundering. He is accused of taking bribes from a construction contractor.

The contractor, Royal Kutz of Highmore, admitted paying Raue $30,000 to $70,000 in bribes from 2003 to 2006. Kutz has pleaded guilty to bribery.


Edwin Patzer was originally indicted by a federal grand jury Oct. 24 on 12 counts of theft and bribery, and had a trial date set for August 26. He had not yet made his initial appearance on the new indictment.

The maximum penalty for the theft, bribery and fraud counts is 10 years in prison. Money laundering can bring up to 20 years behind bars.

Two other defendants charged in connection with the case, Richard Baysinger and Royal Kutz, have pleaded guilty and are scheduled to be sentenced in July.

Baysinger was convicted of laundering the proceeds of mail fraud through his bank account by depositing the money, withdrawing the funds, and then giving the cash to Raue.

The charges regarding Kutz stem from money that was corruptly given to Raue in connection with business transactions involving at least $5,000.

Jackley said his office is committed to ensuring that money provided to benefit South Dakota’s tribes and tribal members is used for its intended purposes.

The investigation was conducted by the Department of Interior’s Office of Inspector General and the FBI.

All defendants were released on bond.