$775,000 embezzled in Arlington

ARLINGTON — A recently retired Arlington city employee is under investigation for allegedly stealing nearly $800,000 from the city during the past six years.

Snohomish County sheriff’s detectives are investigating the Arlington woman for possible first-degree identity theft, first-degree theft and forgery, Arlington city spokeswoman Kristin Banfield said.

“Everyone is just reeling from this,” Banfield said. “It’s a violation of the trust that the public puts in us. It’s also a violation of the trust that we as employees put in each other.”

The woman, 56, worked for Arlington for 30 years. She is a relative of at least one high-ranking city employee. Only the former employee is under investigation, Banfield said. All other city employees were cleared by police of any wrongdoing.

The woman allegedly spent part of her time on the job altering as many as 103 checks, depositing them into her own bank account, according to a search warrant filed Wednesday in Snohomish County Superior Court. Detectives also found evidence of a hidden marijuana-growing operation at her home.

Between February 2002 and June 2008, the woman is suspected of taking $775,753.98 from the city’s general fund, the documents said.

Investigators believe the woman forged signatures and created false supporting documents that made it appear the checks were for employee retirement and other benefit accounts.

After the bank returned the checks, the woman at times used a typewriter to change whom the check was written to, detectives allege.

“It is clear this was a complex ongoing crime to defraud the city of Arlington,” Snohomish County sheriff’s detective Thomas Koziol wrote in the affidavit.

The woman is not under arrest and no charges have been filed. She could not be reached Wednesday for comment.

On Monday, 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.

The Snohomish Regional Drug Task Force has assisted in the investigation because its detectives have expertise in sophisticated financial investigations, sheriff’s Lt. Mark Richardson said.

While working for Arlington, the woman split her time between human resource work and finance functions, Banfield said.

She retired at the end of May. On July 11, a city accountant found a suspicious check for $10,065.15 made out to the woman and notified supervisors.

At first, the employee believed the check was payout for unused sick time and vacation, but quickly learned no such payout had been made.

An investigation began and the city called state auditors, Banfield said.

“We needed their assistance on this,” she said. “They have some of the best tools for financial investigations.”

State law also requires local governments to immediately report suspected misappropriation of public money to the state.

The city also called the Snohomish County Sheriff’s Office instead of the city police department to avoid any apparent conflicts of interest, Banfield said.

Investigators believe all the bad checks were written outside the city’s regular computerized check-writing system.

The city has changed its policies, Banfield said.

Manual checks no longer are permitted, and at least two people are reviewing the administration of all benefits, she said.

As the news spread among city employees, many cried. Others became angry. Some reacted by becoming sick to their stomachs, Banfield said.

“We are just devastated,” she said.

In 2008, Arlington’s general fund was about $11.5 million. Since the thefts apparently began, the general fund has grown by up to about $1 million each year, Banfield said.

The city is working to recoup all the missing money either through restitution from the woman or through the city’s insurance company.

“That’s a heck of a lot of money that we could have been doing a heck of a lot of things with,” she said.

Detectives continue to investigate, the documents said.

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