FORMER ARLINGTON EMPLOYEE SENTENCED FOR MAIL FRAUD AND FILING A FALSE TAX RETURN
Former Employee Embezzled More than $1.3 Million
The former Human Resources Administrator for the City of Arlington, Washington, was sentenced today in U.S. District Court in Seattle to 37 months in prison and three years of supervised release for Mail Fraud and Filing a False Tax return. TERRY L. DAVIS, 57, agreed to forfeit her interest in two properties, two cars, and a Whistler time share condo to the government as part of her plea agreement signed in December 2008. DAVIS has agreed to make full restitution to the City of Arlington of more than $1.3 million. As part of her supervised release U.S. District Judge Ricardo S. Martinez ordered that she continue to participate in Gamblers Anonymous. “It was quite obvious,” Judge Martinez said, “how difficult it has been for the city and citizens of Arlington to shoulder what you have done.”
According to the facts admitted in DAVIS’ plea agreement, she started working for the City of Arlington in 1972. Between 2000 and 2008, DAVIS was the Assistant Financial Director for the city and the Arlington Human Resources Administrator. As part of her job, DAVIS tracked and paid invoices for benefits provided to Arlington employees. Between 2000, and 2008, DAVIS made out 103 unauthorized checks payable to herself and deposited them in her bank account. DAVIS was not entitled to this money, and had forged the authorizing signatures on the checks. After the checks cleared and were returned to the City of Arlington, DAVIS altered the checks and the records relating to the checks to hide her embezzlement. DAVIS embezzled more than $1,311,989 with this scheme which she used for her mortgage payments, car payments, time share condo payments, credit card bills, trips and hotel stays, clothing, and jewelry. Additionally, DAVIS failed to declare the embezzled income on her income tax returns, resulting in a tax loss to the government of more than $281,000.
In his sentencing memo Assistant United States Attorney Darwin Roberts noted that DAVIS “was able to steal well over a million dollars of city funds because she was able to steal thousands of dollars every month, for years on end, without being detected.” And he added that DAVIS’ theft has impacted the small city of Arlington in ways that go beyond finances. In her letter to the judge, Arlington Mayor Margaret Larson wrote Ms. Davis’s fraud has “broken [the] trust” of the City’s taxpayers, damaging years of hard work by the City to show that its staff are “helpful, friendly, and willing to go the extra mile for our customers.” She added that “the broken trust… extends to within the walls of City Hall,” where employees are “angry because our residents and our businesses were deprived of improved services, all for the sole reason of Ms. Davis’s selfishness.”
Speaking through tears DAVIS told the court, “I want and need to publicly apologize to the city of Arlington, the people I worked with and the court. It was taxpayer money that I did not need but they did. It was not done out of greed or the love of the high life. It was done out of compulsion.” DAVIS said Gamblers Anonymous will be part of the rest of her life.
The case was investigated by the Snohomish County Sheriff’s Department and the Internal Revenue Service Criminal Investigations (IRS-CI). The case was prosecuted by Assistant United States Attorney Darwin Roberts.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.
