In a report to be released this week, Clallam County officials expect to learn that a state investigator suspects more than $617,000 in public funds were stolen from the Clallam County Treasurer’s Office, allegedly by former office cashier Catherine Betts.
The report is to be released Tuesday after a nine-month investigation, and county officials heard about it from representatives of both the state attorney general and the state auditor on Wednesday.
State Auditor’s Office fraud investigator Jim Brittain will issue the results of his special audit then, agency spokeswoman Mindy Chambers said Friday.
Brittain, a $115,000-a-year investigator, conducted the investigation of real estate excise transactions that took place at the Treasurer’s Office from 2003 to 2009.
Several county and city of Port Angeles officials, including law enforcement personnel, heard about the report during an unpublicized, half-hour meeting on Wednesday afternoon with Brittain and state Assistant Attorney General Scott Marlow, who has been assigned to the case.
Brittain told the group, which included Treasurer Judy Scott, that he can prove $617,000 was stolen and suspects, “for various reasons,” more was taken, said county Administrator Jim Jones, who attended the meeting.
“There is a problem with records that haven’t been retained prior to [2003],” Jones said.
“He suspects more was taken, and that is going to be prominent in the report.”
Report track two streams
Jones said Brittain’s report will track two streams of money by year from 2003 to 2009: One amount Brittain considers to be suspicious transactions and another he is certain was stolen.
In a separate interview, county Commissioner Mike Chapman, who also was at the meeting, echoed Jones’ recollection.
Brittain told the group he was not yet at liberty to discuss the details of his findings, Jones said.
But Marlow was more definitive at the meeting, Chambers suggested Friday in an e-mail.
Marlow “stated the amount is more than $617,000,” she said.
Added Jones: “[Marlow] said we obviously have criminal activity here, and we are proceeding on the criminal investigation.”
Brittain told the group the investigation took so long because he and his staff scoured many documents: The narrative portion of his report is about nine pages and supported by about 13,000 pages of exhibits, Jones said.
Authorities have said Betts, a former Port Angeles resident, is the lone suspect in the case, which involves the felony theft of taxes levied on property sales.
The Treasurer’s Office distributes the proceeds to the taxing districts in which those sales take place.
The investigation has been ongoing since May 19, 2009, when a Treasurer’s Office employee discovered that the tax records, over which Betts had considerable control, did not balance.
Betts earned about $45,000 annually before she left county employment on June 1, 2009.
She began working at the office in 2001, but was not in the cashier’s position for the entire time, Jones said.
The destruction of records going back further than 2003 — in accordance with state rules on not retaining records after a certain number of years — made Brittain’s job difficult, Jones said.
Scott, treasurer since 2005, said some financial records in her office are routinely destroyed after six years, including warrants — financial instruments that entitle the holders to receive money.
Longtime system
Scott said the same system of tracking and distributing real estate excise taxes had been used for about 20 years and “we never had a problem with it.”
“You don’t know when somebody is going to steal from you,” Scott said.
“When we were looking at her daily balancing, we could not tell there was an issue.”
The theft came to light when an office employee discovered a discrepancy, Scott has said.
The amount of money Betts allegedly stole is “obscene,” Chapman said.
“Who is the agency that would make an arrest, and when will that happen? That’s what people want to know.”
Also at the Wednesday meeting were nine law enforcement personnel from the Port Angeles Police Department and county Sheriff’s Office — including Sheriff Bill Benedict and Police Chief Terry Gallagher — Jones and Chambers said Friday.
The Port Angeles Police Department is the lead agency in the criminal investigation.
Gallagher, who said a detective has been assigned to the case, would not discuss the investigation’s status, what direction the investigation will take after the report is issued or if his department has already interviewed anyone in connection with the theft.
But he suggested Friday the investigation will ramp up this week.
“A critical part of the investigation is the work of the Auditor’s Office,” Gallagher said.
Authorities have said Betts, who they say has admitted to taking $1,200, now lives in Shelton and is not a flight risk.
A phone number for Betts is not listed for that area, and she could not be reached for comment Friday.
Shelton Police Chief Terry Davenport said Friday that Betts’ name “doesn’t ring a bell” and that he has not received “any official requests” from Clallam County law enforcement regarding her whereabouts.
Dan Sytman, a spokesman for the State Attorney General’s Office, said his office will make a decision on a charge or charges.
PA police arrest
The Port Angeles Police Department would make an arrest or arrange with another law enforcement agency to make the arrest if necessary, Sytman said.
Authorities are treating the case as felony first-degree theft. Conviction would mean a sentence of up to 10 years in prison and a maximum $10,000 fine.
The amount stolen is covered by the county’s insurance, but insurance rates are likely to increase as a result of the pay-out, which will be distributed to county taxing districts to whom the money is owed, Jones has said.
Scott, a 27-year employee of the Treasurer’s Office, said the accounting system under which the theft occurred was in place in late 2004 when she was appointed treasurer, succeeding Ruth Gerdon.
Those procedures have since been tightened, Scott said.
Scott ran successfully for an unexpired one-year term in 2005, won a four-year term in 2006 and said she plans to run for re-election this November.
Gerdon now lives in Arizona, Scott said. Gerdon could not be reached for comment on Friday.
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Staff writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.
