Getting to the bottom of Lake Forest Park's water district embezzlement scamon February 20, 2013 @ 4:30 pm (Updated: 10:37 am - 2/21/13 )
Lake Forest Park Water District official was fired for embezzling over $350,000 over seven years.
The Lake Forest Park employee put her two children on the payroll and bought office supplies with Water District money, returning the supplies and pocketing the cash.
The fraud was discovered by accident, during a routine audit.
The Lake Forest Park Water District immediately removed the woman; she was placed on unpaid leave indefinitely and her keys were taken away.
Only Tuesday, with the release of an official audit, was she fired. It was a matter of state law, Donahue explained.
When Dori asked how the fraud was possible, Donahue explained that the Water District board members usually meet once a month so that commissioners can approve expenses.
"What we know from the audit report," said Donahue. "It's fairly evident that there were attempts to alter time sheets and embed documentation, perhaps after commissioners signed off on payments."
Though Dori thought the commissioners were negligent, Donahue guessed that the woman accused was a trusted employee who started slowly and embezzled more and more money over time.
Dori did the math. He estimates that the woman stole about $400 from each ratepayer in Lake Forest Park.
Will they get the money back? Donahue says that individual ratepayers probably will not be getting a check from the water district.
"I would anticipate that the recovery from insurance would forestall the need to raise rates in the future and would provide funding for many of the capital projects that have been postponed - that should have been done but have been postponed," said Donahue.
Though Dori is calling for the employee to pay back the money and go to jail, it's unclear if charges will be filed.
"It is my hope," said Donahue, "that justice is served. But we are not privy to what the district attorney or federal attorneys may do with the case. My understanding is that it is of sufficient magnitude that someone is going to prosecute."
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