Husband of bookkeeper accused of laundering
Published August 8, 2005
Prosecutors plan to file criminal charges against the husband of a former bookkeeper who allegedly embezzled $1.7 million from an Olympia dental clinic.
The husband, Michael P. Doughty, 45, of Lacey, was arrested Monday on suspicion of laundering some of the money his wife, Lori L. Doughty, allegedly stole from The Fisher Group, where she worked as a part-time bookkeeper.
Lori Doughty, 36, was fired in June and also arrested. She pleaded not guilty earlier this month in Thurston County Superior Court to charges of first-degree theft, money laundering, forgery and trafficking in stolen property.
"We started looking at him immediately. If my wife had been bringing in an extra million-and-a-half over the last five years under our family budget, I probably would have asked about it," Olympia police Lt. Steve Oderman said.
Law enforcement officials think it is one of the largest embezzlement cases ever reported in Thurston County. While money was being stolen, the couple took extravagant trips, bought expensive items and donated a $4,000 scoreboard to a South Sound high school.
Detectives began to look at money flowing into Michael Doughty's self-owned company, First Response Emergency Medical Training Corp., which reportedly provides first-aid training and equipment, authorities said.
Financial records show that almost all of the sales his company made since it incorporated were to his wife, who made the purchases with her credit cards. She then allegedly paid off her credit card balances with checks from the dentists' company account, authorities said.
The money going into her husband's business was transferred into his corporate account and then into their personal accounts, authorities said.
Initial police reports filed with prosecutors on Tuesday list one year, 2004, in which Michael Doughty did about $27,000 in business. About $21,000 of those sales were made to his wife.
"As far as we can tell, he has had virtually no income for his business for years, except for real or fictitious purchases paid for with money from the dentists' office," Senior Deputy Prosecuting Attorney Joseph Wheeler said. "His main customer was her."
Lori Doughty may have been stealing money from her employer as far back as 1998, Oderman said. Her husband's company incorporated in 1999, according to the Secretary of State's office.
Doughty started the company after being fired from the Bellevue Fire Department, where he was a paramedic. An Olympia police report says he was terminated for dishonesty, although the exact reasons were unclear. A department human resources official did not return a phone call seeking comment.
Lori Doughty's defense attorney, John Sinclair, said Tuesday that Michael Doughty's arrest came as a surprise to the family. Sinclair is not representing Michael Doughty, who has hired another attorney.
"The family is obviously pretty upset with everything happening, especially with both mother and father being charged at the present time," he said.
Michael Doughty was arrested at the couple's rental home at 5832 54th Way S.E., which also is listed as his office address. He was booked into the Thurston County Jail on suspicion of money laundering, first-degree possession of stolen property, and trafficking in stolen property. He was released after posting a bail bond.
His wife was released a week after her arrest when her parents put up their property as collateral for a $100,000 bail bond. A judge ordered her to avoid any jobs that would require her to handle money. She still is unemployed, her attorney said.
The amount of the thefts, originally estimated at $1 million, have turned out to be closer to $1.7 million, taken between 2000 and 2005. Those figures still could climb, said Wheeler, the prosecutor.
Wheeler said he expected to charge Michael Doughty today.
The couple are well-known in the community for school volunteer work and their involvement in youth sports. Michael Doughty was a youth baseball coach and past president of Lacey Babe Ruth Baseball. In court last month, Sinclair said Lori Doughty was very involved in the community and in the athletic activities of the couple's two teenage sons.
Long before their arrests, the couple's spending habits had drawn attention from acquaintances.
They took several expensive vacations to Hawaii and Arizona and to various sporting camps, which police verified through the couple's travel agency, Oderman said.
Before Lori Doughty was arrested on July 18, the couple owned a boat, personal watercraft, expensive jewelry and a 7-Series BMW with a license plate that read: "Envy Us." They handed over much of the property to the dental clinic after she was confronted.
The couple also made large donations to area sports teams and North Thurston Public Schools.
The school district received about $7,500 worth of sports equipment from the couple during the past few years, district spokesman Tim McGillivray said.
They donated the new baseball scoreboard that stands above Timberline High School's baseball field. They also donated batting cages, football headsets and a riding lawn mower, McGillivray said.
Their children attend schools in the district.
Detectives still were trying to track where all the money was spent, said Oderman, the police lieutenant.
"It's a lot of money. It's averaging about $250,000 to $350,000 a year that they were taking out of that business," Oderman said. "We haven't had time to run down all the stuff they've donated or paid for people."