Second lawsuit filed against Oak Harbor woman accused of stealing

A second lawsuit was filed Monday against a bookkeeper accused of embezzling more than $200,000 from two North Whidbey community organizations.

Oak Harbor attorney Thomas Sandstrom, who works at the law offices of Christon Skinner, filed the complaint for money damages in Island County Superior Court on behalf of Hillcrest Village Water Co.

The long list of defendants in the suit include 50-year-old Oak Harbor resident Wendy Murphy, her husband, another relative, Rolling Hills-Glencairn Community Service, two credit card companies, a mortgage company and three insurance companies.

Rolling Hills-Glencairn Community Service also filed a lawsuit against Wendy Murphy earlier this year. Murphy didn’t contest that suit and the judge ordered a judgment against her requiring she pay Rolling Hills-Glencairn $57,000.

Under the terms of the Rolling Hills-Glencairn settlement, Wendy Murphy’s husband, Sean Murphy, was removed from the list of defendants. Each wrote statements explaining that he knew nothing about the embezzlement and that the marital community didn’t profit.

In his declaration, Sean Murphy wrote that his wife went to the casino frequently, but he monitored their bank accounts and she never spent a lot of money.

He wrote that neither he nor his business received any of the money she allegedly embezzled.

Court documents state that Valerie Wiley, the former bookkeeper for Rolling Hills, trained Wendy Murphy to take over for her in 2009. The community’s board approached Wiley in early 2013 after concerns arose about missing funds.

Wiley reviewed the books and discovered that thousands of dollars were missing.

Court documents also state that the majority of the funds were taken through unauthorized charges and cash advances on the organization’s credit card.

The Rolling Hills board president sent out a letter to members in March which states that officials believe that individual accounts were not affected.

To complicate matters, Wendy Murphy allegedly embezzled money from Hillcrest Village Water Co., where she was also employed as a bookkeeper, to cover her embezzlement from Rolling Hills, according to an affidavit in support of a search warrant.

The affidavit is on file in Island County Superior Court.

Wendy Murphy is not been charged with a crime. Lt. Mike Hawley with the Island County Sheriff’s Office is investigating the allegations. The prosecutor’s office has not received his report yet.

In a lawsuit filed Monday, Sandstrom wrote that Wendy Murphy allegedly embezzled more than $168,000 from Hillcrest Village Water Co. while she was the organization’s bookkeeper.

The lawsuit also states that Rolling Hills-Glencairn Community Service is liable for $61,000 it received from checks that Wendy Murphy wrote on the Hillcrest Village Water account.

Rolling Hills “knew or should known” that the checks were not authorized and “failed to make reasonable inquiries into the source and purpose of the receipts,” Hillcrest Village Water Co. maintains in its lawsuit.

Likewise, the lawsuit indicates that Wendy Murphy wrote checks on the Hillcrest account to cover thousands of dollars of her credit card and other bills.

Sandstrom said he filed the lawsuit against the entities to recover the “unjust enrichment.”

We encourage an open exchange of ideas on this story's topic, but we ask you to follow our guidelines for respecting community standards. Personal attacks, inappropriate language, and off-topic comments may be removed, and comment privileges revoked, per our Terms of Use. Please see our FAQ if you have questions or concerns about using Facebook to comment.

Read the Oct 22
Green Edition

Browse the print edition page by page, including stories and ads.

Browse the archives.

Friends to Follow

View All Updates