As executive director of the Tillicum community center, Karen Priest discovered how easily banks sometimes reimburse stolen funds.
She took what she learned and used it to offset her mounting personal financial problems and gambling addiction, claiming nearly $15,000 in fraudulent charges that she herself made, authorities allege.
Pierce County prosecutors Monday charged Priest with first-degree theft, second-degree theft and two counts of false swearing. She has not been arrested and is to be arraigned May 23.
Priest said Monday she was shocked by the charges and had no idea she was being investigated. She also insisted there had been no financial misappropriations at the community center, which she has run for seven years.
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The city of Lakewood asked for an audit of the Tillicum American Lakes Garden Community Service Center after noticing discrepancies in its financial records in 2011.
An independent accountant looked only at money that passed through the city for the federal Community Development Block Grant program. The consultant could form no opinion about whether the center misused the federal money, but Lakewood officials said they don't think anything criminal occurred with the block grant money.
City Manager John Caulfield said Monday that the city didn't uncover any misappropriations during its audit and it wouldn't change how it works with the center in light of the charges filed against Priest.
Police said the genesis of Priest's plan came in February 2012 when she reported a check stolen from the center and the bank quickly reimbursed the missing money.
"This was a legitimate claim but Priest learned the reimbursement process for Columbia Bank was relatively simple, " Tacoma police detective Elizabeth Schieferdecker wrote in a police report. ". . . I believe Priest filed the fraudulent claims with Columbia Bank based on her experience with the ease of the process."
Priest first reported fraud with her personal account in January 2013. She claimed someone accessed her debit card online through her Facebook account and made 200 charges totaling $4,700. The bank reimbursed Priest and issued her a new card.
In September, Priest again filed a police report stating someone had used her new card without her knowledge. She asked the bank to reimburse her nearly $10,000.
Columbia Bank was suspicious this time and asked Tacoma police to launch an investigation. Detectives found that all the charges were for Facebook games and all traced back to Priest's computer at the community center, according to charging papers.
Records show Priest sought help from Facebook two months before she canceled her debit card or contacted police. In July, she asked the social media conglomerate to refund her money for the game charges, calling them "unbelievable" and saying "obviously someone has it out for me."
She also asked that the company no longer allow charges from her account.
A Facebook representative asked Priest to send the company the alleged fraudulent charges so it could look into them but she didn't respond until August.
In January, Facebook denied Priest's request and said there was no evidence of fraud because "there does not appear to be any irregular login patterns indicating a compromised account, " records show.
Schieferdecker got search warrants and began analyzing Priest's spending habits and the alleged fraudulent charges. The detective noticed Priest was fond of online gambling and Facebook games and often made cash withdrawals from casinos.
She found indicators of Priest's financial troubles, which included her filing for Chapter 7 bankruptcy in February and having her Tacoma home foreclosed on.
Police inspected Priest's Facebook account in October, where she'd "liked" 15 games and applications on the site. By February, after detectives confronted her about the charges, Priest had deleted most of her likes but still posted about her success on various gambling games.
Schieferdecker used spreadsheets to sort through the extensive charges Priest said were made by someone else.
In three months, Priest's debit card showed 459 purchases on Facebook for just under $10,000. Most were for games such as Jackpot Party Casino, Candy Crush, Zynga and Angry Birds.
Detectives visited Priest at work in October to discuss the case. They asked her to come to the station to make a recorded statement and take a polygraph test.
That's when Priest allegedly began backpedaling.
"Priest rambled extensively about the stress she had been under causing her to have a nervous breakdown, " the detective wrote in a report.
Priest said she suffered blackouts. She suggested a recently fired employee could have been the culprit. She mentioned a gambling problem but insisted it was under control. She acknowledged some of the Facebook charges were hers but said not all of them were.
On Monday, she reiterated her belief that a former employee was responsible for the alleged fraudulent charges to her account and said the matter had been resolved more than a year ago.
"Those charges were on Facebook that had been cleared with the bank in their investigation, " she said. "I have the letters showing that the investigation was done and the money was put back into my account."
Columbia Bank reimbursed Priest $11,900, records indicate.
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Stacia Glenn: 253-597-8653 stacia.glenn@ thenewstribune.com
Staff writer Brynn Grimley contributed to this report.