UPDATE: Jury Finds Final “Gear Up” Defendant Not Guilty

SIOUX FALLS, S.D. – A Minnehaha County jury finds Stacy Phelps not guilty on all counts.  That decision was announced just after 10:30 p.m. Thursday.  The jury began deliberating Phelps’ charges of falsifying evidence and conspiracy Thursday afternoon.  We’ll bring you reaction from the courthouse as we get it.


Earlier we reported…

After more than a week of testimony, a jury is deliberating in the case of Stacy Phelps. The “Gear Up” defendant is facing charges for allegedly falsifying evidence by backdating contracts.

His defense lawyer says Phelps was duped by Scott Westerhuis, who embezzled more than a million dollars before killing his family and himself in 2015.

Phelps testified that he did indeed backdate contracts.

However, next is where the prosecution and defense disagree.

“It’s inherently fraudulent to replace them,” said the prosecution.

However, the defense calls Phelps’ reasoning legitimate.

First, the prosecution gave its closing argument to the jury.

“The choice to do the right or wrong thing was up to him [Phelps],” said the prosecution.

The prosecution argued the newer, backdated “counterfeit contracts” provided Phelps with “secret income from secret contracts.”

The prosecution says Phelps backdated contracts to avoid an audit and thus the end of a “gravy train.”

The prosecution argued that the newer contracts didn’t exist on the dates they were backdated to, and that the defense’s argument in based on a series of coincidences.

By law, if a jury finds any of those coincidences to be plausible, there is reasonable doubt and thus jurors must return a verdict of “not guilty.”

Ultimately, the prosecution says that the charges listed on the indictment can’t be blamed on another person, and that Phelps is not a victim of Westerhuis’ nor the government searching for a conspiracy scapegoat.

“[This case is] the white collar crime version of ‘dog ate my homework,” said the prosecution.

The defense gave its closing argument next. The defense says the only thing Phelps is guilty of is trusting Scott and Nicole Westerhuis. The defense says that across cultures, people are inclined to trust others.

“This case is about trust,” said the defense.

The defense argues that anyone could have made the mistake of trusting the Platte couple.

The defense says Phelps signed contracts, believing they were legitimate. Since Phelps is not an auditor, he did not realize the difference in language in contracts yielded legal implications, particularly the difference between a subrecipient and a vendor.

The prosecution pointed to phone records indicating that Phelps and Westerhuis were communicating the day the alleged crime took place. The defense says this isn’t incriminating, as Westerhuis and Phelps communicated everyday.

Stacy Phelps “was one of the most respected people in the state of South Dakota,” said the defense. “Scott Westerhuis was a world class criminal.”

The defense also asked Judge Anderson to declare a mistrial, a motion Anderson denied.

The jury has an option to listen to a 2015 audio interview between Phelps and a DCI agent.

During closing arguments, both the prosecution and defense encouraged to jury to listen to it again before reaching a verdict.

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