8/14/08

Arlington employee suspected of theft

by Beckye Randall

The City of Arlington recently uncovered a long-standing embezzlement scheme that has siphoned nearly $800,000 from municipal coffers.

“Devastated,” is how assistant city administrator Kristin Banfield describes the effect of that discovery.

“The staff, the managers, we’re all just devastated,” Banfield said in a recent phone interview. “The employee who is suspected of this was trusted, even loved, by her co-workers. Everyone is feeling absolute, utter devastation.”

The woman, who recently retired from a 30-year career with the city, is being investigated for first-degree theft, identity theft and forgery. Since she has yet to be formally charged, her name has not been released to the public.

The former employee worked in the city’s Human Resources department and helped prepare budget estimates for salary and benefits compensation funds. According to Banfield, she began to inflate those figures and siphon the extra money for her own use.

“The employee accounts were never underfunded,” Banfield assured. “The city’s retirement and tax payments are on deposit with the state and are not at risk.”

Beginning in early 2002 and continuing through June of this year, the woman is believed to have diverted more than $775,000 from the city’s general fund by forging signatures and creating false documents.

“She made the checks out to herself and then intercepted them when they were returned from the bank,” Banfield explained. “Apparently, she would then alter the checks again to change the payee so it would match the documentation for the payment.”

After the woman’s retirement in May, a city accountant found a suspicious check payable to the employee in the amount of $10,065.15. After determining the payment was not authorized, the city quickly notified state auditors and the sheriff’s department.

The City of Arlington undergoes a financial audit each year, even though the state auditor’s office only requires such a process every two years. Banfield said the city follows all state regulations regarding departmental checks and balances. “We were doing everything right,” she said.

With search warrants in hand, sheriff’s deputies seized items from the woman’s home that included computers, bank records and other financial evidence. Allegedly finding evidence of a marijuana growing operation and sales of the illegal drug, the Snohomish Regional Drug Task Force was also called into the case.  

The county sheriff’s department is leading the investigation into the crime, not only to ensure an independent review but also because “they have much more experience with this sort of thing,” Banfield said.

“Now we’re focused on what we can do to restore public confidence,” said the administrator. “We will aggressively work to recover those assets, both through restitution and property seizure. The city also carries insurance against this kind of loss.”

“It’s just so devastating,” said Banfield, echoing the prevalent feeling. “We could have done so much more for our citizens with that money. One more police officer on the street, a park fully developed, needed road repairs taken care of.”

“We’ve worked so hard to build public trust,” she said. “The rebuilding starts today.”