KENNEWICK — A former state Department of Social and Health Services (DSHS) employee and his wife are accused of stealing more than $112,000 by billing the agency for nonexistent services for developmentally disabled clients.

Arthur and Carol Krontz of Walla Walla were named in the 31-count federal indictments Wednesday alleging health-care fraud, money laundering and theft of public money.

They were arraigned yesterday in U.S. District Court in Yakima, Assistant U.S. Attorney K. Jill Bolton said. Defense attorneys were being appointed for the couple.

Arthur Krontz was released with conditions, while his wife was ordered held in the Yakima County Jail after prosecutors alleged she was a British citizen not lawfully in the United States, Bolton said.

The indictment accuses Arthur Krontz, a social worker for the DSHS Division of Developmental Disabilities, of billing the agency for at least $112,711 for services that were never delivered to developmentally disabled clients.

The indictments also accuse Krontz of unlawfully collecting disability payments and receiving education benefits for his stepdaughters in amounts totaling more than $115,000 from the state Department of Veterans Affairs.

Krontz worked for DSHS from 1999 to June 2004, when he left the agency, spokesman David Workman said Wednesday, declining to elaborate.

Krontz had the ability to authorize more than $32 million in health-care benefits for developmentally disabled residents of Franklin, Benton, Yakima, Walla Walla, Asotin, Garfield, Columbia and Kittitas counties, the indictment said.

Krontz's wife, Carol, allegedly opened an account at Banner Bank in Walla Walla under the name Access for Challenged Children and Adults, Carol A. Krontz, in January 2001.

The indictment said Krontz submitted invoices through the fictitious business to The Arc of the Tri-Cities, which contracts with the state to deliver services to the developmentally disabled.

Krontz also allegedly designated his stepdaughters Andrea and Lucy Bottomley as authorized service providers for developmentally disabled children and authorized payments to them through Arc.

Lucy Bottomley allegedly received more than $16,000, and checks to Andrea Bottomley totaled more than $13,000.