State auditor points to alleged Housing Authority theft

EVERETT — A woman who was supposed to manage affordable housing properties in Snohomish County allegedly embezzled more than $56,000.

The Housing Authority of Snohomish County notified authorities in 2011 after finding problems, according to a report issued Monday by the state Auditor’s Office.

The woman worked as an investment manager for a private property company. Under a complicated agreement, the housing authority contracted with the company to manage properties in Marysville and Lynnwood.

The alleged theft happened between June 2010 and May 2011, when she was fired. State auditors allege that the woman made payments to fake vendors, among other things.

The company has paid back the missing money, as required by the contract, Housing Authority Executive Director Bob Davis said Monday.

The contract limited the housing authority’s financial oversight, he said. Auditors recommended that the housing authority review its internal controls.

“We’re looking at what we can do,” Davis said.

Auditors also reviewed financial documents for other staff at the company and didn’t find additional problems, the report says. The housing authority has ceased contracting with the company.

Pursuing fraud allegations is key to holding governments accountable for public money, said Thomas Shapley, spokesman for the auditor’s office.

The woman reportedly used some of the money to pay bills for other properties she managed that weren’t under the housing authority. She created vendor names similar to real vendors to avoid detection, the auditors say.

The auditors’ findings were forwarded to county prosecutors. No charges have been filed. Fraud investigations often take several years.

Rikki King: 425-339-3449, rking@heraldnet.com.

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