Authorities searched the home of former Corn Palace Director Mark Schilling last week, and new details of the investigation have since emerged in court documents filed in conjunction with the search.
A search warrant and its supporting affidavit filed Monday, both prepared by Chris Konrad, an agent with the South Dakota Division of Criminal Investigation, show investigators looked for -- and, in at least one case, found -- items Schilling allegedly bought from Cabela's in Mitchell with Cabela's gift cards meant to be donations from the store to the Corn Palace Festivals in 2012 and 2013.
A gift card given to Schilling by Cabela's on July 13, 2012, as a donation to the 2012 Corn Palace Festival was later used in a transaction at Cabela's in Mitchell on Nov. 29, 2013, to buy a pistol for $462.58, and the firearms transaction record shows the purchase was made by Schilling, the affidavit says. A pistol with a matching serial number was among the items found in Schilling's home during the search, which was conducted shortly before 9 a.m. Oct. 28.
The gift card was one of at least $1,000 total in mishandled Cabela's gift cards given to Schilling by the store, all intended as donations to the Corn Palace Festivals in 2012 and 2013, the affidavit says.
Two $100 gift cards given to Schilling by Cabela's on Aug. 27, 2013, as donations to the 2013 Corn Palace Festival, were used to purchase various items of clothing. Those purchases were associated with Schilling's home phone number, based on a store profile created when a customer provides a phone number to the cashier when making a purchase, the affidavit says.
Eleven Cabela's gift cards were used Nov. 9, 2013, to purchase multiple items from the Mitchell retail store, including a GoPro camera for $329.99. Those purchases were also associated with Schilling, based on a store profile from a phone number. Two of those gift cards were each for $100 and meant as donations for the 2012 Corn Palace Festival.
A $100 gift card from Cabela's meant as a donation, as well as 10 $25 gift cards from Cabela's bought by an outside source were used by Schilling's son-in-law, the affidavit says.
Schilling, 49, resigned his position as Corn Palace Director on March 3 after a state audit of the Corn Palace's finances found he routinely counted money from the city-owned arena and tourist attraction's cash registers alone in his office, failed to keep and maintain proper financial records, and misused city credit cards on multiple occasions.
The Daily Republic has been unable to contact Schilling since his resignation.
Mayor Ken Tracy asked for Schilling's resignation after he was shown the initial results of the audit.
The 20-page audit report was released to the public two weeks after Schilling's resignation was announced at a March 3 City Council meeting. At the time, Tracy said he did not have evidence to suggest Schilling stole money or committed any crimes, but did confirm DCI was looking into the matter.
The audit was performed about two months after an investigation by the Mitchell Police Division began on Oct. 2, 2013, as a result of allegations that Schilling had stolen popcorn owned by the Mitchell Area Chamber of Commerce and then sold it without permission, according to the affidavit.
Other concerns about Schilling and his management of the Corn Palace's finances were raised during that investigation, the affidavit says. Public Safety Chief Lyndon Overweg and Lt. Detective Don Everson sent reports to Tyler Neuharth, a DCI agent, who determined the audit should be performed. The audit was conducted by the South Dakota Department of Legislative Audit in December 2013.
When Schilling was asked to resign March 3, Billie Kelly, the city's human resources director, told investigators Schilling had deleted records from his computer, the affidavit says. After receiving that information, the DCI agents searched Schilling's office, including his computer and cell phone, and found "numerous electronic storage devices" and paperwork had been thrown away in the office prior to the search, the affidavit says. The investigators also found bags of credit card receipts that appeared to be from tickets bought for customers at the Corn Palace.
Kelly later informed investigators that Schilling's personnel records from 2007 to 2010 were missing and that Schilling had a key to those records in the city's finance office, the affidavit says. Kelly contacted Teri Bertness, a former human resources director for the city, and found evaluations had been completed during those years and "most of those evaluations were not positive and she had addressed concerns regarding his management of money and his work habits," the affidavit says.
Marilyn Wilson, the city's finance officer, told investigators in a March 4 interview she was first concerned about Schilling when she went to a garage sale at the home of Schilling's sister-in-law in Mitchell, the affidavit says. She noticed items there that appeared to be new with unopened packaging. Wilson bought a few of the items and later matched them to vouchers the city received from a government program that provides certain items to municipalities.
Wilson told investigators she believed Schilling took those items from the city and sold them at a garage sale, the affidavit says.
Wilson could not recall exactly when those events took place but said it was when Lou Sebert was mayor. Sebert served two three-year terms as the city's mayor, having been elected in 2006 and 2009.
In a meeting with Sebert, Schilling, Overweg and then-City Attorney Randy Stiles, Wilson presented the information and "was told by (Sebert) that they did not feel it was a big enough deal to warrant any further action and was basically told to mind her own business," the affidavit says.