Former Arlington employee pleads guilty to fraud and filing a false tax return

The former Human Resources Administrator for the city of Arlington pleaded guilty Dec. 30, 2008 in U.S. District Court in Seattle to Mail Fraud and Filing a False Tax return.

Terry L. Davis, 57, faces up to twenty years in prison and a $250,000 fine when sentenced by U.S. District Judge Ricardo S. Martinez on March 27, 2009. As part of her plea agreement Davis agrees to forfeit two properties, two cars, and a Whistler time-share condo to the government. Davis agrees to make full restitution to the city of Arlington of more than $1.3 million.

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.

The case was investigated by the Snohomish County Sheriff’s Department and the Internal Revenue Service Criminal Investigations (IRS-CI). The case is being prosecuted by Assistant United States Attorney Darwin Roberts.

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