Former Arlington city worker charged in theft

Published 10:46 pm Thursday, December 18, 2008

SEATTLE — A former city of Arlington finance worker is charged with 13 federal crimes for allegedly embezzling at least $1.3 million in public money.

Terry L. Davis of Arlington worked for the city for 32 years and at one time was the assistant financial director.

Between 2000 and her retirement in May 2008, Davis admitted writing herself dozens of checks using city funds. She used the city’s money to pay for her mortgage and home improvements, according to court papers.

The fraud was discovered in July when a city accountant found a suspicious check made out to the woman, prompting the investigation.

Federal prosecutors on Tuesday charged Davis with seven counts of mail fraud and six counts of filing false tax returns.

Davis’ attorney, Mark Mestel of Everett, told the Associated Press that she was scheduled to plead guilty in U.S. District Court in Seattle on Thursday. Court was suspended, however, because of snow.

Davis faces a sentence of about three years in prison under federal guidelines. Authorities also are seeking to have her properties, valued at about $730,000, forfeited to the government.

Investigators believe Davis spent years issuing herself more than 100 unauthorized city checks. The payments were made after Davis forged signatures and made unauthorized use of a city ink stamp, according to court papers filed by assistant U.S. attorneys Robert Westinghouse and Darwin Roberts.

Davis allegedly deposited the checks in her own bank account, intercepted them after they came back from the bank, and then submitted bogus checks, and other accounting paperwork, according to prosecutors.

“Davis did this in order to hide that the checks had been made payable to her, and thus to allow her to continue her scheme to defraud the city without being detected,” prosecutors wrote.

The scheme relied in part on using the mail system and the filing of false tax returns, in violation of federal law, federal prosecutors contend.

The thefts became public in August when detectives served search warrants at the woman’s bank and her home. In addition to bank and investment records, computers and other evidence, police also allegedly seized marijuana plants, scales and a ledger listing apparent drug sales, according to documents.

Reporter Scott North: 425-339-3431 or north@heraldnet.com.