The former chief financial officer for the Fort Worden Public Development Authority who was accused of first-degree theft in September 2019, was sentenced Aug. 2 in Jefferson County Superior Court.

Diane Machelle Moody, 59, entered a guilty plea on June 28, and according to sentencing documents, is required to pay nearly $40,000 in restitution while facing 90 days of electronic home monitoring.

Jefferson County Prosecutor James Kennedy filed court documents accusing Moody of stealing from the PDA while employed by the public agency in 2019.

Moody was at the center of a fraud investigation conducted by the Washington State Auditor’s Office. The investigation found Moody set up false vendor accounts and billed the PDA for $10,054 that was paid to her husband’s construction business. The construction business was no longer in operation at the time of the misappropriation of money.

The fraud happened when the PDA was overseen by former executive director Dave Robison.

The fraud report after the state investigation into the alleged embezzlement said Moody, who resigned in July 2020, entered two expenditures payable to her husband’s business into the PDA’s electronic payment system.

The first was for $4,822, and was made Sept. 15, 2019.

An invoice supporting the payment did not provide specific details about the work that the business did, according to the fraud report, and did not include the typical approval signature.

The report noted Moody printed and signed a check for payment.

Moody again entered another expenditure of $5,232 for repair expenses payable to the same construction business on Nov. 19, 2019. She also printed and signed a check for that payment.

An invoice supporting the payment could not be found.

Moody was listed as the registered agent for her husband’s business. The fraud report said the business had been dissolved March 3, 2019 — more than six months before Moody recorded and made the first payment as the PDA’s chief financial officer.

Moody resigned from the Fort Worden PDA in 2020, which the report said happened “after the authority identified a bank account transfer she attempted without a documented explanation or board approval.”

In its response to the fraud report, PDA officials noted they had uncovered other “violations of law” by Moody.

A detective from the Port Townsend Police Department interviewed Moody about the misappropriation of PDA money. In a police report about the interview, Moody blamed her husband for the bogus checks and said she was shocked about the allegations.

Moody said her husband had given her time sheets for the work that his company billed to the PDA.

Moody also told police she had written out the checks from the PDA that were paid to her husband, but did not give a clear answer about who deposited the checks into her husband’s Wells Fargo business account.

Representatives from the State Auditor’s Office presented the findings of the state fraud investigation and the case was eventually referred to the Jefferson County Prosecutor’s Office.

According to the PDA’s 2018 and 2019 statements filed with the state, the PDA noted: “In 2020 the district became aware that its CFO was violating finance-related legal and contractual provisions as follows:

• Failure to file annual financial reports;

• Failure to comply with BARS [Budgeting, Accounting and Reporting System];

• Diversion of Capital Funds to Operations without proper authority;

• Possible embezzlement.”

The Washington State Auditor’ Office asked the PDA to seek recovery of the $10,054 in bogus checks, as well as the $21,000 it cost to conduct the investigation.