FBI investigating Lynnwood police

¿ Veteran deputy chief probe target

By Diana Hefley, Jim Haley and Scott North

For the Enterprise

A Lynnwood Police Department deputy chief is under investigation for allegedly stealing more than $14,000 cash plus cocaine and firearms seized in criminal investigations, court documents show.

Paul C. Watkins, 50, one of the department’s two deputy chiefs, is the subject of an FBI public corruption investigation. The probe has examined Watkins’ personal finances as well as evidence-handling practices at the police department.

Federal agents have focused in particular on allegations that in 2002 Watkins took money, several grams of cocaine and two guns from the custody of Snohomish County Superior Court and never booked the items into the Lynnwood police evidence room, according to documents made public Oct. 25 in the U.S. District Court in Seattle.

The FBI found some of the missing evidence ¿ including a .38-caliber revolver ¿ and police files at Watkins’ home during an Oct. 22 search, documents show. Some of the evidence had been missing for five years.

Watkins has been placed on paid administrative leave. He declined comment. No charges have been filed, but the case appears to be the focus of a federal grand jury.

Watkins had been rising through the ranks of the Lynnwood Police Department. He was the commander of the investigators division when he was promoted to deputy chief in 2005.

Watkins told investigators he put the missing items in evidence lockers at the police department, but failed to fill out the proper paperwork.

“These items were never received by the Lynnwood Police Department’s evidence section and all efforts to locate them have been made to no avail,” an FBI affidavit in support of a search warrant said.

The money should have been forfeited to the city of Lynnwood or returned to its original owners between October 2001 and October 2005, the FBI search warrant stated.

Lynnwood police alerted the FBI in June to a possible “public corruption matter,” and requested assistance, FBI documents show. Police Chief Steve Jensen alerted the FBI.

Lynnwood officials had discovered money missing when police conducted their own audit of cases involving seized evidence.

“I know it is tough on everybody. I know it is a shock to everybody but it is the right thing to do and you have to do it properly, that’s why I went to the FBI,” Jensen said this week.

The department did not contact the state auditor’s office, or alert the auditor that thousands of dollars of cash, as well as drugs and guns were missing from the department’s evidence locker.

In 2005, state auditors detected “minor” problems when they examined how evidence was secured, documented and tracked, said auditor spokeswoman Mindy Chambers. The audit found no identification was required for officers to check out evidence and no logbook was being kept to document what evidence was being removed.

Now, the state auditor will recommend Lynnwood officials develop protocols to alert the state to future known or suspected losses, Chambers said.

“They are obligated to tell us,” Chambers said. “Ultimately, it is up to city management to be sure a system is in place to protect city assets.”

Chief Jensen said keeping the FBI investigation secret was important because an improper release of information could have led to lost evidence, and constitute obstruction of justice.

The investigation has been difficult on the department, he said. Watkins is highly regarded among Lynnwood officers and other police departments, and throughout the community, Jensen said.

It was tough seeing somebody you work with every day, knowing that their conduct, their financial history, their life, is secretly being scrutinized by federal agents, the police chief said.

“It is definitely difficult to have a protracted investigation with someone you work directly with and someone you have promoted,” he said.

As part of the investigation, Lynnwood police provided the FBI with documents, court records and statements indicating that in 2002, Watkins, while serving as the commander of the department’s criminal investigations division, may have stolen evidence from a 1996 robbery investigation, the FBI’s affidavit said. Police said Watkins took $14,046, several grams of suspected cocaine and two guns.

Watkins’ alleged financial misconduct primarily revolves around how he reportedly handled the release of cash seized during drug investigations. Federal agents have found more than five dozen instances involving Watkins where cash was taken but adequate records were not kept.

Federal investigators have raised suspicions about more than $23,000 in cash deposits made to Watkins’ bank account during the past six years. He has a history of financial problems, including seeking bankruptcy protection four times between 1987 and 2004.

Diana Hefley, Jim Haley and Scott North are reporters with the Herald of Everett.