Family ruined; thefts blamed

Published 2:38 pm Saturday, April 25, 2009

MUKILTEO — A Mukilteo couple just assumed their 34-year-old business was feeling the sting of a struggling economy. They never imagined a hefty half-million dollars in losses would eventually be chalked up to embezzlement.

Don and Janice Whitson started VisualGraphics Inc., a graphic design business, in the 1970s. The Whitsons were conservative business owners who hoped that if they worked hard, their investment would see them through their retirement years.

They hired Susan Arrington more than two decades ago to oversee the company’s books. She was a trusted employee, who became “part of the family,” the Whitsons said.

Prosecutors this week charged Arrington with first-degree theft. The amount of money involved and Arrington’s position of trust prompted prosecutors to file the case as a “major economic offense,” raising the possibility for extra punishment. Arrington, 55, of Marysville, is accused of stealing $531,362 from the small Mukilteo business since 2002.

Prosecutors believe the embezzlement likely started even earlier, according to court documents.

The Whitson said they didn’t have any idea that Arrington was stealing from them. Their business was flourishing in 2001. They employed nine people. Then they were hit by a sharp downturn. They attributed the change to the stalling economy after the terrorist attacks in September 2001. Business didn’t pick up and they sold off the Mukilteo office building and began operating the business from their home. Don Whitson, 65, abandoned his plans to retire.

“We were forced to downsize the business. We had to sell our home in Mukilteo and move into a condominium. We had to lay off employees,” Don Whitson said. “It’s been tough. The business is a shell of what it was.”

The disturbing evidence came to light in June. Don Whitson received notice from his bank that his account was overdrawn, Snohomish County deputy prosecutor Walt Sowa wrote in court documents.

The Whitsons soon discovered that someone had made unauthorized withdrawals from their checking account over three months. The checks were written to Arrington, Sowa wrote. A forensic accountant audited the company’s books. The results were astounding to the Whitsons.

More than 340 checks had been forged since 2002, Sowa wrote. Investigators discovered that many of the checks were cashed at an area bank and a check-cashing business. Everett police detective Molly Spellman was able to match the forged checks with deposits made to Arrington’s account, Sowa wrote. An employee at the check-cashing business told investigators Arrington was a regular customer, according to court documents.

Evidence also showed that Arrington altered checks made out to the Internal Revenue Service and took the money for herself, leaving the business’s taxes unpaid, Sowa wrote.

The former bookkeeper is suspected of using the company’s software to digitally copy Don Whitson’s signature on the forged checks.

“We couldn’t believe what we were seeing,” Don Whitson said. “It went deeper and deeper.”

The Whitsons confronted Arrington in June. She allegedly told the couple she had been writing herself checks for about two years, according to court documents. Arrington reportedly said she used the money to pay her bills and support her family.

Don Whitson never saw her driving a fancy car or other indications of a lifestyle change.

“No one knows where the money went,” he said.

The Whitsons filed a civil lawsuit against Arrington in August, accusing her of conversion, unjust enrichment, accounting fraud and breach of fiduciary duty. She denied the allegations.

The Whitsons continue to operate their business. Janice Whitson oversees the books these days. They can’t help but wonder what their business might have become with an extra half-million dollars.

“Something like this eats at you,” Don Whitson said. “It grinds at you.”

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