10/09/08

IRS files seizure notice against former Arlington municipal employee

by Beckye Randall

The retired City of Arlington employee accused of embezzling more than $775,000 from city coffers is the subject of a federal complaint from the IRS.

The trusted former employee has been identified as Terry Davis, the city’s former assistant finance director and HR administrator.

The IRS filed a complaint against Davis seeking forfeiture of two properties in U.S. District Court in Seattle on August 18. Davis has admitted to using some of the embezzled funds to make mortgage payments on the properties in question. The transactions constitute mail fraud, a federal offense, and can result in forfeiture of the assets involved.

Beginning in early 2002 and continuing through June of this year, the woman is believed to have diverted more than $775,000 from the city’s general fund by forging signatures and creating false documents.

“She made the checks out to herself and then intercepted them when they were returned from the bank,” Kristin Banfield, Arlington’s assistant administrator, explained. “Apparently, she would then alter the checks again to change the payee so it would match the documentation for the payment.”

After the woman’s retirement in May, a city accountant found a suspicious check payable to the employee in the amount of $10,065.15. After determining the payment was not authorized, the city quickly noti­fied state auditors and the sheriff’s department.

Warrants were issued August 6 to search Davis’ residence and obtain records from her bank.
According to figures obtained as a result of a public records request, Davis earned an annual salary of $82,236 in 2007. She was hired by the city in May of 1972.

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