Woman accuses boss in scheme that stole millions from Pierce County Housing Authority, court filing says

A former employee accused of stealing millions from the Pierce County Housing Authority alleges that the head of the agency orchestrated and profited from the scheme.

“I take full responsibility for my actions,” former Housing Authority finance director Cova Campbell said in a declaration filed Friday in Pierce County Superior Court. “I am extremely remorseful for harm I have caused, and will make full restitution. There is, however, dramatically more to the story than the complaint tells.”

The Housing Authority filed a lawsuit in August, alleging that Campbell and her husband, Mark Campbell, appeared to have stolen more than $4 million.

The Housing Authority has an annual budget of $32 million.

Executive director Charlie Gray told The News Tribune at the time that the alleged theft was discovered as part of a routine state audit and that the agency would fully cooperate with the State Auditor’s Office and any criminal investigation. Campbell was fired Aug. 8, according to court records.

The agency’s court filings accused Campbell of diverting funds for at least several years and using $1.96 million to buy 310 acres of real estate in Oklahoma. The rest was unaccounted for, the court records said.

Campbell’s declaration accuses Gray of planning the theft and says she participated to keep from losing her job.

Gray did not respond to a News Tribune phone call or email Friday seeking comment.

Attempts to get comment from leaders of the agency’s Board of Commissioners also were unsuccessful.

A hearing in the case brought by the Housing Authority is set for later this month in Pierce County Superior Court.

Campbell’s attorney, Russell Knight, also said the state auditor took her deposition Oct. 10 and will now have to investigate Gray.

“I’ve dedicated the vast majority of my working life to the Pierce County Housing Authority and deeply believe in its mission,” Campbell’s declaration says.

She started as an accounting clerk at the agency in 1998 and became the finance director in 2014, which also was the year she was diagnosed with ovarian cancer.

“Prior to starting treatment, I often worked 70 or more hours a week,” the declaration says. “After beginning treatment, I reduced my hours to 40 hours a week. I still worked on evenings and weekends when necessary to make up for missing time during the work day for medical appointments.”

Gray became the head of the agency in 2015.

“Almost immediately after Gray became my supervisor, he told me my work absences were not acceptable, and that they were impacting my job performance,” the declaration says.

She said she tried to meet his expectations but that he spoke to her in his office in December 2015 and said she hadn’t.

“Mr. Gray then told me he had a solution,” the declaration says. “He requested that I divert PCHA funds to a private account and give the funds to him. In exchange, Mr. Gray would guarantee I still had a job.”

She says she was shocked, uncomfortable, could not speak and that her heart was racing.

“When I didn’t respond and clearly looked upset, Mr. Gray told me that he wouldn’t take any federal funds,” the declaration says. “Mr. Gray’s plan was to take funds from an account that was used to maintain three separate apartment buildings owned by PCHA. Mr. Gray explained that diverting funds from the account would go unnoticed.”

He allegedly planned to make fake invoices for vendors that he said wouldn’t raise suspicions of the Board of Commissioners.

“Mr. Gray then told me these invoices would be paid by electronic transfer to my personal bank account and I could keep a portion of the diverted funds for myself as long as I gave him what he asked,” the declaration says. “I left the meeting extremely scared. I didn’t say yes to Mr. Gray’s demand, and I didn’t say no. I don’t recall saying anything at all. I could barely speak.”

Later that month he allegedly showed her how to alter invoices using a software program.

“In early 2016, Mr. Gray instructed me to do a one-time transfer,” the declaration says. “He directed all of the terms of the transfer including the vendor, the amount, and the date and that the funds would be deposited into my account.”

The declaration says: “I faced an impossible decision: lose my job, or take the obviously wrong actions that my boss directed me to take.”

She chose the latter.

“Mr. Gray then directed me to retain the funds in my account until after the next Board of Commissioners meeting so he could see whether the transfer raised any suspicions,” the declaration says.

She says she believed that she would be fired and that Gray would make it “near impossible” for her to find other work.

“Shortly after the first transfer, Mr. Gray asked me to do it again,” the declaration says. “At Mr. Gray’s direction, this scheme was repeated many, many times from early 2016 to mid-2019.”

Sometimes Campbell gave him the cash is person and sometimes she sent it through interoffice mail at his direction, she says.

“As time went on, Mr. Gray began demanding larger and larger amounts of cash,” the declaration says.

Eventually she wired funds to Oklahoma to buy real property in her name.

“Mr. Gray approved these transactions and assisted in explaining the large transfers and dwindling cash balance to the Board of Commissioners,” the declaration says.

Despite his approval, Gray “was angry that he wasn’t immediately getting a share of those funds,” the declaration says. “He demanded larger amounts of cash to make up for the fact that he did not receive any cash from the purchase of real estate. In addition, Mr. Gray began demanding that I make pro-formas for investment he wanted PCHA to purchase to look profitable when they would not be. These demands also made me extremely uncomfortable.”

She says she knew her role would come to light and that she’s relieved it did.

“Although my actions were without question objectively wrong and I retained significant funds belonging to PCHA, I knew I would be fired if I stopped diverting funds for Mr. Gray,” the declaration says. “I felt extreme pressure to continue to meet his demands.”

Alexis Krell covers local, state and federal court cases that affect Pierce County. She started covering courts in 2016. Before that she wrote about crime and breaking news for almost four years as The News Tribune’s night reporter.