Former Arlington city employee pleads guilty to embezzling $1.3 million

The former assistant finance director for the city of Arlington pleaded guilty today to embezzling more than $1.3 million from the city over the past eight years.

Terry L. Davis was charged earlier this month in U.S. District Court in Seattle with seven counts of mail fraud and six counts of filing false tax returns. Davis negotiated the charges with the U.S. Attorney's Office and has waived her right to indictment by a grand jury, according to the Attorney's Office.

Davis pleaded guilty to one count of each charge, said Emily Langlie, spokeswoman for the U.S. Attorney's Office. Davis faces up to 20 years in prison and a $250,000 fine when she's sentenced on March 27.

Davis wrote hundreds of city checks to herself over the years while working at the $83,000-a-year position. She used the money for home improvements, mortgage payments and other personal items, charges allege.

According to the charges, Davis began working for the city in 1976 and served as the No. 2 person in the Finance Department from 2000 to 2008. She retired in 2003 but was rehired into her prior position.

During that eight-year period, the charges state, Davis forged 103 checks and deposited them into her account. When the checks were returned, she intercepted and altered them to hide her tracks, according to the charges.

As part of her plea agreement Davis will forfeit two properties, two cars, and a time share condo in Whistler, B.C. to the government. She will also pay more than $1.3 million in restitution to the City of Arlington.

Seattle Times staff reporter Jennifer Sullivan contributed to this report.