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Feb.28, 2010

The Port Angeles Police Department is remaining tight-lipped about its investigation of $617,467 in stolen public funds from the Clallam County Treasurer's Office.

"The investigation is going well," Police Chief Terry Gallagher said Friday.

"I do not have a completion date."

His office has not interviewed former Treasurer's Office cashier Catherine Betts, who Treasurer Judy Scott said last week remains the lone suspect for the theft.

"We have not talked to [Betts]," Gallagher said.

Gallagher had said in an earlier interview that his investigation would accelerate once the state auditor's office released a report on its investigation into the theft.

Gallagher would not specify Friday what that meant now that he has the report in hand.

"We need to do our job the way we know it should be done, regardless of what public sentiment might be," he said.

In the report released last week, auditor's office fraud investigator Jim Brittain said he could confirm that the former cashier embezzled $617,467 in real estate excise tax payments from 2004 to May 19, 2009, when the treasurer's office discovered a discrepancy and put Betts on administrative leave.

Betts was terminated a month later.

The auditor's report says the cash was taken by a cashier who worked for the period of time Betts did, but does not refer to her by name.

Police have said Betts, 46, a former Port Angeles resident who now lives in Shelton, is not a flight risk.

Asked how authorities know that, Gallagher said, "In a general sense, where are you going to go? In today's world, we can find you if we need you."

Betts allegedly confessed to treasurer's office staff on May 19 that she stole $1,200 in funds, a misdemeanor.

Theft of more than $1,500 is a felony punishable by a maximum $10,000 fine and a prison sentence of up to 10 years.

Authorities did not interview her when she allegedly confessed.

Gallagher said Treasurer's Office staff drove her to an attorney's office, because of a different issue, before that could happen.

"They took her to an attorney's office before they called police," he said.

But he suggested that didn't matter in terms of questioning her.

A confession in itself may not be enough to trigger interviewing her about the crime, Gallagher said.

"Talking in generalities, as a rule, the police do not interview people or interrogate people until they have good command of the facts," Gallagher said.

"I want to have all the information I need to conduct an effective interview."

Had police arrested her on the basis of the confession and had pleaded guilty or been convicted, it would have prevented future charges from being filed when it was discovered more money was stolen because of double-jeopardy issues, Gallagher said.

That's because "the same set of circumstances" is involved, Gallagher said.

"All we have is a different set of numbers at the end."

The nature of the crime also calls for police to wait to arrest the suspected culprit, he said.

"In a complex white-collar crime, you don't do that sort of thing until you know you have completed your investigation, and know you have done all you can possibly do," Gallagher said.

The state Attorney General's Office, which is expected to file the felony theft charge against Betts once the police investigation concludes, has said that the money probably will not be recovered.

Clallam County Sheriff Bill Benedict said last week Betts was known to frequent casinos throughout the region.

In a letter to the editor in today's Peninsula Daily News (see box at right), county Prosecuting Attorney Deb Kelly said she asked the state Attorney General's Office to handle prosecution of the case "both to avoid conflicts in my duties to act as prosecutor and legal advisor to all County officials and as a result of the accounting complexities and magnitude of the alleged theft."

She also said, "I share outrage over allegations of public employee abuses of trust and thefts of money."

Brittain said Betts used a check-for-cash scheme that involved replacing office cash with checks Betts received from the public, pocketing the cash and altering and destroying office records to conceal the crime.

Brittain refused to be interviewed to provide details on his report, which county Risk Manager Marge Upham said Friday were lacking in that report.

Clallam County filed an insurance claim last week for $683,534, minus $10,000 deductible, with provider Great American Insurance Group, Upham said.

The claim consists of $617,467 for the actual theft, $60,067 for the cost of the state Auditor's Office investigation and $6,000 in records costs, Upham said.