Embezzlement leaves Pasco downtown group owing $111,000 (with video)

Calls continue to trickle in to Mike Miller’s phone from curious business owners inquiring about unpaid bills.

The former president and current treasurer of the Downtown Pasco Development Authority has had frank conversations with all the callers.

He is forced to explain more than $100,000 is still owed to about 30 businesses and the Internal Revenue Service after an embezzlement scandal rocked the small nonprofit, leaving its finances in shambles and its former executive director, Michael Goins, behind bars.

Officials at the development authority — a public agency formed in 2010 to rejuvenate downtown Pasco — have started to reimburse some businesses, but it could be some time before the large debt is paid off.

“We still have people that are coming out of the woodwork,” Miller said. “It’s troubling.”

Police have estimated that Goins bilked $90,000 from the organization over two years. The state Auditor’s Office is investigating the case to determine the extent of the scheme and specifically how much was taken.

A report from the state is expected soon. Goins has pleaded guilty to first-degree theft, and the length of his sentence depends on if more than $150,000 was stolen.

The development authority is expected to release its annual report Feb. 22 at the Pasco City Council meeting.

Documents obtained by the Herald through a state public records request show that, at the end of last year, the development authority owed about $111,000 to at least 40 companies and the federal government.

By the end of January, the organization had paid off some of its debts, but it still owed $104,000 — just less than half of its 2015 operating budget of $276,000.

The biggest debt, almost $73,000, is back taxes to the IRS.

The IRS began closing in on Goins last July, questioning him about the unpaid taxes. Goins told police he tried to stall tax agents and thought he had time to raise the money to cover the tax bill.

However, IRS officials in Yakima caught on to the discrepancies and demanded a meeting with Goins, who knew he likely would be busted.

“I (thought) I would have a couple months to raise the funds in our fundraising, but it wasn’t a couple months, it was like a week,” Goins told police in a taped interview obtained by the Herald.

Some of the companies and small Tri-City businesses still were owed more than $1,000 include Abbott’s Printing, Able Tank & Toilet, Leaf, Sara Nelson Design, Townsquare Media, the Tri-City Herald and Varsity Facility Services.

Several businesses contacted by the Herald said that, despite being owed money, they did not want to talk about the outstanding debt.

The development authority hopes insurance money will help pay off some of the debts. Miller told the Herald business owners have been patient and understanding about the situation.

“We expect we will be able to pay off the IRS and pay off whoever else is outstanding,” Miller said.

Goins claims he spent the money he stole on personal bills, plane tickets to see his family in New Jersey and other things. He told the Herald that drugs or alcohol never played a part in his decision to take the money.

Goins was issued a credit card by the development authority after he was hired. Credit card statements obtained by the Herald show he used the card from at least June 2013 to August 2015.

He racked up thousands of dollars of charges on the card, including divorce lawyer fees, plane tickets, meals, hotels, rental cars, gas and other personal expenses, records show.

Miller said Goins was not authorized to make many of the purchases on the statements.

Goins used his company credit card to spend at least $5,500 at Adinolfi & Liberman, a New Jersey law firm that specializes in divorce. Goins divorced his wife after moving to Washington from New Jersey. He later remarried.

Though Goins spent several thousand dollars on plane tickets and rental cars to travel, he was never authorized to fly out of the state using company money, Miller said. He attended at least one company event in Vancouver, Wash.

“We weren’t supposed to be paying for any of his trips (out of state),” Miller said. “We didn’t know that until we got the bank statements recently.”

Goins also charged well more than $1,000 at Tri-City grocery stores. There also were charges totaling more than $1,000 for an online furniture store, local hotel rooms and cellphone and cable bills.

It was not unusual for Goins to shop at grocery stores for development authority business, but the amount of money he spent at the stores leads Miller to believe the charges were for personal use, he said.

State officials are still sorting out whether the cellphone and cable bills were for Goins’ personal use, Miller said. He can only remember one time when Goins may have purchased a hotel room with development authority authorization.

Goins went over his credit limit of $1,500 several times. He stopped using the card about August 2015, around the same time the IRS sought to question him.

The balance of $1,635 on the Bank of the West credit card was paid off in January, records show.

Goins tried to commit suicide after Miller and the IRS were tipped off about the theft. He was treated for mental health issues at Lourdes Counseling Center before being interviewed by police.

During his stay in the psychiatric facility, Goins wrote a brief letter to Miller explaining his actions.

“Let me say that while there are no words that can express my feelings, I know I am sorry for the trouble I have caused,” Goins said. “While I cannot have sufficient reasons for my actions, I do know they were not right.”

The letter was dated two days after the embezzlement came to light.

“I lost track with how much, but I always thought I would be able to get out of it,” Goins wrote. “I thought I could raise more funds, I could find a new grant and things would be covered.”

Reporter Kristin M. Kraemer contributed to this story.

This story was originally published February 20, 2016 at 9:24 PM with the headline "Embezzlement leaves Pasco downtown group owing $111,000 (with video)."