Former Franklin County official Huston pleads guilty to theft

Kristin M. Kraemer, Tri-City HeraldFebruary 1, 2013 

Dennis Merle Huston admitted in court for the second time in his life Thursday that he defrauded a government agency to support his cocaine habit.

The guilty plea came just two days before the one-year anniversary of his arrest for pocketing more than $2.8 million of Franklin County's money.

It is the largest public embezzlement case in state history, according to the Washington State Auditor's Office.

Huston -- who was the Franklin County Public Works accounting and administrative director when he was fired -- started the theft scheme less than a month after being hired as an accountant in May 1989.

He opened a bank account in the name of a Spokane company and submitted invoices to the county for equipment and parts it never would receive, court documents show.

Federal agents looked into allegations of misconduct in 2009 and found no wrongdoing. It wasn't until early 2012 when Franklin County Auditor Matt Beaton and Pasco police Officer David Yates broke open the fraud case after an audit of the county's vendor list showed that payments continued to be made to a company that was no longer in business.

On Thursday, Huston, 66, stood before Superior Court Judge Vic VanderSchoor and pleaded guilty as charged to first-degree theft, money laundering and cocaine possession.

The Pasco man also admitted on the nondrug charges the three aggravating factors that the crime was a major economic offense because: it involved a high degree of sophistication and planning; it occurred over a lengthy period of time; and Huston used his "position of trust, confidence and fiduciary responsibility."

Huston in his plea statement said he intended to deprive the county of property valued at more than $5,000.

"I also conducted financial transactions involving the proceeds of theft and I knew the property was proceeds of theft," he wrote. "Both offenses had a high degree of sophistication, occurred over a lengthy period of time and I used a trust relationship to facilitate the commission of the crimes."

Assistant Attorney General Scott Marlow said he was confident he would have won guilty verdicts if there had been a trial.

"If I had to take this case to trial, that would have been fun," he told the Herald. "There's a tremendous amount of evidence thanks to Mr. Yates."

In filing the case, prosecutors went after Huston for a "conservative minimum" of about $1.8 million. But Marlow said he plans to ask for the full restitution -- $2,842,939.

Will Franklin County actually see that money again?

"At this point in time I don't believe so," Marlow said. "We have, I think, a very, very clear picture of Mr. Huston's financial circumstances given the case we've investigated and we've done. And I don't believe, unfortunately, that Franklin County will get that money back."

It's going to fester for a long time given that a lot of money was stolen, Marlow said, but this plea allows people to start moving past it.

"I think the best relief is for the people of Franklin County to have this in the rearview mirror here," he said.

Marlow handled the case because of a conflict with the Franklin County Prosecutor's Office.

Prosecutor Shawn Sant is proceeding with civil litigation against Huston.

The standard range is up to a year in jail on the theft and money laundering charges, and up to one year and six months in prison for the cocaine Huston had when he was arrested Feb. 2, 2012, in his office.

Marlow said the aggravating circumstances allow him to ask for more time, so he will recommend a 15-year prison term. Huston deserves a longer sentence than the standard because of his prior federal conviction and the amount of money he stole, he said.

The maximum possible sentence is 25 years.

Defense attorney John Jensen asked for a sentencing hearing in six to eight weeks. No date was set.

Jensen also requested that the state Department of Corrections complete a presentencing background report.

The prosecution asked that Huston be jailed until sentencing with bail set at $2.8 million.

Jensen argued that his client is not a threat to the community.

"The reality of the situation here is, your honor, if the court was to accept the court's recommendation, with age and health it would likely be a death sentence," he said. "We want him to have those last couple of weeks to spend with his family before he is sentenced."

VanderSchoor set bail at $10,000. Huston was taken into custody after the hearing but released at 12:30 p.m. once he posted bail.

Franklin County Commission Chairman Rick Miller told the Herald he hopes the judge will opt for a longer sentence than 15 years.

"The guy has been ripping us off for 20 years. I have no sympathy for that," Miller said. "It was $2.8 million from the county. That's a lot of taxpayer money -- 80,000 people he took money from. I think that's a big crime and he should be liable for that. I feel (15) years might be light."

Miller and fellow Commissioner Brad Peck said they were pleased the guilty plea would save taxpayers the cost of a trial.

"I'm not particularly surprised (by the plea) given the amount of evidence we had," Peck said. "On the other hand, I'm disappointed such a thing could go on without being detected for 22 years."

Commissioners emphasized that the county has new safeguards in place to try to prevent future thefts. A new $1.1 million accounting software package is one of the new layers of checks and balances. The software has been installed and should be active once employees finish training.

Peck gave Auditor Beaton and his staff credit for bringing the theft to light.

"At the end of the day (their work) is really what brought this out," he said.

New Attorney General Bob Ferguson released a statement saying he was proud of his criminal justice division's work on the case.

"Taxpayers place trust in their public employees, and this case sends a message that those who abuse the public trust will be held accountable," he said.

Huston started working for Franklin County in May 1989, about eight months after he was paroled by the Federal Bureau of Prisons. He was convicted of stealing $142,000 in 1986 while he was a financial officer with the federal Bureau of Reclamation in Montana.

He didn't tell his new boss about his previous conviction until he was on the job for two months. He only revealed his past after his probation officer threatened to tell the county if Huston didn't do it himself.

Huston's road department supervisors, and the county commissioners at the time, made the decision to keep him because he was doing good work and they believed there were "enough checks and balances" in place.

Fast forward 20 years and the FBI was asked to look at Huston for allegedly falsifying an invoice and pocketing $21,000 to $40,000 for tires bought but never received.

A nine-month federal investigation was closed in February 2010 after officials said they could find no evidence Huston "has embezzled funds in any fashion from Franklin County," according to case file documents.

That decision was made even though Huston failed a polygraph test. Co-workers and supervisors interviewed by the FBI indicated they never had any suspicion that Huston was involved in improper activity and thought the theft allegation was "bogus."

Then last year, Beaton realized the county was paying bills to Critzer Equipment even though the business had closed in November 2001.

Officer Yates stepped in to discover Huston had long ago opened a bank account as the company's sole proprietor and was submitting the false invoices. There were some months where the county made two to three payments of $4,000 to $9,000, documents said.

After his arrest, Huston told Pasco police he used the money to support his $100-a-day cocaine habit and for gambling.

Pasco police Capt. Jim Raymond credited Yates for his work, and said he was named the department's 2012 officer of the year.

"Seriously, when it comes down to it, that's where it belongs," he said. "The rest of us just afforded it so (Yates) could work."

--Reporter Michelle Dupler contributed to this report.

Tri-City Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service