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Robert Frank, City Editor frank@heraldnet.com

Welfare worker accused of stealing nearly $75,000

By Diana Hefley, Herald Writer

LYNNWOOD -- A former state employee entrusted to help the poor has been arrested for allegedly stealing almost $75,000 meant for welfare clients.

As a financial services specialist, Richard N. Hartline, 30, opened accounts and authorized funds for people who applied for medical, food and financial assistance from the State Department of Social and Health Services.

Detectives believe Hartline opened bogus accounts, withdrew the cash and kept the money, according to court documents. Investigators found evidence that Hartline fraudulently authorized $74,599 to be deposited into 11 fake accounts between December 2005 and September 2006.

"He was able to circumvent the checks and balances," Washington State Patrol detective Charles Sletten said. "He found a glitch in the system."

Hartline resigned from DSHS in November. He agreed to surrender to police and was booked into jail for investigation of multiple felony counts of misappropriation and falsification of accounts. Hartline appeared Thursday in Everett District Court, where a judge ordered him released without bail.

He declined to speak with investigators about the allegations, Sletten said.

A second DSHS financial services specialist resigned in connection with the case last year. Investigators believe that man gave Hartline access to his computer and Hartline opened two fraudulent accounts using the man's name and password, Sletten said. Detectives don't believe the second employee was directly involved in the alleged thefts.

The fraudulent accounts first came to the attention of administrators at the Lynnwood DSHS office in September 2006 after they received complaints that Hartline was dealing drugs to clients, according to court documents. Hartline had worked for DSHS since August 2002.

A supervisor audited the clients' accounts and discovered that Hartline had authorized financial assistance to the two men without verifying that they were eligible, Sletten wrote. The office launched a full audit.

DSHS policy requires an applicant to meet with a caseworker, who will determine if the person is eligible for assistance and also verify the applicant's identity, according to court documents. The information is then passed along to a financial service specialist who opens an account for the person. The client is given a card, like a debit card, to purchase items or withdraw cash.

Detectives believe Hartline recorded computer records for 11 accounts to make it appear that the application had been properly processed. He also backdated the accounts so caseworkers were unaware that they needed to verify the person's identity, Sletten wrote. Once he opened the fraudulent accounts, Hartline allegedly authorized backdated deposits, according to court documents.

Detectives spoke with seven of the 11 people who had accounts opened in their names. They all were friends or former high school classmates of Hartline but denied knowing that he was stealing from the state using their names, according to court documents.

Police believe once the money was deposited, Hartline got the clients' cards and immediately withdrew the money. Four clients told police they'd lent Hartline their cards for various reasons, Sletten wrote.

Detectives couldn't find any evidence that the clients were involved in the thefts and don't expect to make any additional arrests, Sletten said.

DSHS officials believe their internal controls worked to catch the fraud. They haven't changed anything in the system, spokeswoman Kathy Spears said. DSHS financial transactions are routinely audited, she said.

She had no explanation why it took nearly nine months to discover the fraudulent accounts.

"As soon as we got wind, we took action," she said.



Reporter Diana Hefley: 425-339-3463 or hefley@heraldnet.com.