TACOMA, Wash. (AP) — The former finance director of a public housing authority in Washington state stole nearly $7 million from the agency, auditors said in a report issued Monday.
It’s believed to be the largest theft ever from a public agency in the state, KNKX-FM reported.
The Washington State Auditor’s Office began investigating in in July after a routine audit found unauthorized transfers of several hundred thousand dollars. It appeared that the authority’s finance director, Cova Campbell, and her husband used the money to buy property in Wagoner County, Oklahoma. Campbell was fired in August.
Further investigation revealed that Campbell had also routed transfers to her bank account disguised as vendor payments, the auditor’s report said. In all, it said she stole $6.9 million from 2016 to this year.
The findings have been reported to the FBI and the inspector general of the U.S. Department of Housing and Urban Development. The Pierce County Housing Authority has a budget of $32 million — a mix of state, federal and private money, which it uses to provide affordable housing for more than 4,000 low-income people each year.
The auditor’s report said that in a recorded deposition, in a written statement and in an interview with investigators that Campbell had admitted the theft.
However, she also claimed that she did it at the insistence of the agency’s executive director, Charlie Gray. She said Gray was disappointed with her work and told her to divert the money into a private account and funnel most of it to him in exchange for her continued employment.
The auditor’s office said it examined Gray’s finances and found no evidence he was involved in or benefited from Campbell’s theft, but investigators did find some evidence that contradicted Campbell’s statements.
The housing authority placed Gray on administrative leave upon learning of Campbell’s allegations, but has said in court documents that “presently nothing but the word of an admitted thief suggests that (Gray) shares any culpability for Ms. Campbell’s embezzlement.”
The housing authority has sued Campbell and her husband in Pierce County Superior Court, accusing them of using those funds for personal purchases.
In October, Pierce County Superior Court Judge Kitty-Ann van Doorninck froze the Campbells’ bank and retirement accounts, blocking them from transferring funds or selling assets while the agency tries to recoup its losses.
The state auditor’s report said the authority’s insurance policy only covers $500,000 in losses from employee theft.
The report faulted the housing authority for not having measures in place to prevent the theft. It noted that Campbell had little to no oversight and that the number of bank accounts the agency had made it tough to detect the fraud.