Former Water Association Treasurer Charged With Theft

Spokane prosecutors charged a woman earlier this month with first-degree theft for allegedly stealing thousands of dollars from residents of Reflection Lake.

Kristine L. Zollars, 32, is accused of stealing money when she was treasurer of the Reflection Lake Water Association, according to Spokane County Superior Court records.

At the time, Zollars was married to sheriff’s deputy Mike Zollars. Court records show they were divorced in August of last year.

She now goes by her maiden name, Kristine L. Krahn, but Superior Court records still call her Zollars.

Zollars and her attorney, William Mableson, refused to comment.

But Mableson said his client agrees “the probability does exist that some monies were used without authorization,” according to documents filed in Spokane Superior Court.

Mike Perrizo, attorney for the water association, said the investigation is continuing. No trial date has been set.

The Reflection Lake Water Association consists of 40 members who own property in the Reflection Lake area, located east of Deer Park. The purpose of the group is to provide members with water service.

Each member pays the association a one-time hook-up fee of $2,500 and a monthly fee of $20.

The non-paid executive water association board consists of a president, vice president, secretary and treasurer. Zollars was elected treasurer in June, 1993, until she was asked to step down in February last year.

According to court records, four years ago, Zollars sent a letter to association members informing them that the association’s savings account was approximately $15,000.

Zollars recommended taking $6,000 from the savings account and investing it in certificates of deposit. In January, 1997, water association members found out their accounts were almost entirely empty, records said.

Board members learned there was no money in the water association’s bank account after trying to replace a damaged water pump after the 1996 ice storm.

Shortly thereafter, the water association hired Perrizo to investigate the case.

Perrizo subpoenaed records from First Interstate Bank (now Wells Fargo), Northland Credit Union and the Spokane Teachers Credit Union where the Zollars, who were married at the time, had a personal account.

Dave Martin, the investigating sheriff’s detective, said that on March 15, 1994, Zollars opened an account at First Interstate Bank for the Reflection Lake Water Association, records said.

The next day, a $6,000 withdrawal was made from the water association’s other account at Northland. That same day, a $6,000 check is cashed at the Zollars’ teachers credit union savings account, records said.

According to Martin: “$3,001 is deposited into the Zollars’ account, and a check in the amount of $3,000 is made out to Reflection Water.”

“No certificate of deposit was ever purchased,” Martin said.

Martin noted that beginning in late March of 1994, “A series of transfers and withdrawals began occurring with the Northland Credit Union account of Reflection Water.”

Funds were being regularly transferred from savings to checking, and then checks on this account were written to Reflection Lake Water Association, Martin said.

“Frequently these checks would have a notation written at the bottom indicating, ‘for certificated of deposit account.’ The majority of these checks were written for amounts between $250 and $850. (The name) Kristine Zollars appears at the bottom of these checks,” he said.

The checks were then cashed at the First Interstate account of Reflection Lake Water, with generally $10 to $125 deposited into the account and the remainder taken as cash, he said.

Court records said the water association’s Northland savings account went from $14,975.24 in February 1994, to $143.82 by January 1997.

The water association’s checking account was also reduced from $1,451.36 to $123.88 during the same time period, records said.

Barbara Wilson, the water association’s former secretary, will testify against Zollars, court records said. She served as secretary from 1970 to Feb. 15, 1997.

As secretary, Wilson’s signature was required in addition to the treasurer’s signature on any check written from the Northland account.

Wilson told investigators that it was her understanding that the First Interstate Bank account was “strictly for certificates of deposit so the association would make more interest on its savings.”

Wilson said that on Feb. 18, 1997, she was at Zollars’ home when she confronted her about the missing money.

Wilson claims she heard Zollars admit that she had stolen money from the water Association and that she had never purchased any certificates of deposit for the association.

, DataTimes