Doneia Santiago

Auditor’s Fraud Report Details Theft From Mossyrock by Former Clerk

By Natalie Johnson / njohnson@chronline.com

In addition to misappropriating at least $65,895 from the city of Mossyrock’s bank accounts and credit cards, former Mossyrock clerk and treasurer Doneia Santiago altered bank statements and created fake invoices to mask the thefts, according to a report released Thursday by the Washington state Auditor’s Office. 

 Former Mossyrock Clerk Sentenced to Five Years in Prison for Embezzlement

Police first began investigating the possible embezzlement in June 2016 after the city’s bank informed the mayor of an issue with checks. 

Santiago, 54, of Salkum, was charged June 27, 2016, with first-degree theft on suspicion of stealing $7,700 from Mossyrock to pay her own bills. 

Santiago initially told investigators that any transfers were made in error and that she intended to pay them back.

On July 8, after further investigation by police, the Lewis County Prosecutor’s Office amended her charges to include nine counts each of first-degree theft and identity theft, increasing the estimated amount stolen to $33,000, according to court documents.

She pleaded guilty to nine counts of first-degree identity theft in September, 2016. She was sentenced to 60 months, or five years in prison. 

After the police finished their investigation, state auditors stepped in to conduct their own fraud investigation to determine exactly what was stolen and how. 

The report outlined misappropriations of $65,895 and another $4,142 in questionable activity between January 2014 and June 2016. 

According to the auditors’ report, a continued police investigation involving bank statements found 17 payments from city accounts to pay Santiago’s mortgage, totaling $56,981. The auditors agreed with that finding.

The Auditor’s Office also found an additional misappropriated payment from city bank accounts of $1,914. 

 Mossyrock Clerk Pleads Guilty to Identity Theft

In total, the auditors found $65,895 misappropriated through general disbursements, fuel and credit cards and another $4,142 in questionable charges to the city. 

Santiago also appeared to attempt to hide where the money was going, according to the Auditors Office report.

“When reviewing City documentation, we found the former Clerk/Treasurer created fictitious invoices to make the personal mortgage payments appear to be for an engineering business tied to a public works project,” according to the report. “In addition, we identified altered bank statements intended to make the personal mortgage payment appear to match the engineering business name and the fictitious invoices.”

The auditors’ report found the city’s internal controls over its finances were not sufficient to “safeguard public resources.” 

The report identified weaknesses including insufficient oversight of the clerk’s activities, lack of monitoring of credit and fuel cards, lack of review of general disbursements from city funds and a lack of a secondary review of payroll. 

“We recommend the City seek recovery of the misappropriated $65,895, questionable transactions as appropriate, and related investigation costs of $10,700 from the former Clerk/Treasurer and/or its insurance bonding company,” the auditors’ report states. “Any compromise or settlement of this claim by the City must be approved in writing by the Attorney General and State Auditor as directed by state law.”

In a response to the report, Mossyrock Mayor Thomas Meade thanked auditors for their work in the investigation, but expressed a concern that it would be difficult to recoup the losses. 

The city’s response also details how it has addressed the auditors’ recommendations on internal controls.

“With the help of the State Auditor’s Office, and possibly future on-site training to help spot areas of inconsistency and areas of improvement, we here at the City of Mossyrock hope to move forward and improve to better serve the constituents of our community,” Meade wrote. “Integrity and honesty is the best policy for everyone concerned.”