Guilty plea expected in bank fraud case

Wed., Sept. 1, 2004

By Bill Morlin billm@spokesman.com

A former accounts-payable officer for a downtown Spokane real estate investment company is scheduled to appear in U.S. District Court today to face eight counts of bank fraud.

Valerie M. Hughes, 26, is accused of forging signatures on checks and filing false vouchers and pay advances while employed at Pacific Security Financial Inc.

Some of the $80,000 she is alleged to have stolen was from a debenture account of an elderly woman who has since died, said Assistant U.S. Attorney Aine Ahmed.

Hughes is accused of taking approximately $59,000 from the account of the late Pearl Gustin and $21,000 from Pacific Security.

Some of the money from the real estate firm was stolen when Hughes allegedly forged the signature of Kevin Guthrie, an officer of the company, on checks written on the firm’s Washington Mutual bank account, court documents allege.

Hughes worked at Pacific Security from November 1998 until August 2000 when the fraud was uncovered and she was fired, officials said.

As part of her “scheme to defraud” the company, Hughes obtained payroll advances for herself and submitted fraudulent expense reimbursement vouchers, it is alleged.

Hughes, formerly known as Valerie Knapp-Waddell, was formally charged last week in a superceding indictment returned by a federal grand jury that heard testimony from an FBI agent who investigated the case.

Benjamin R. Henson, who is accused of assisting Hughes in the scheme, is charged with one count of bank fraud.

Hughes and Henson both were released until they stand trial.

Hughes is scheduled to appear before Senior U.S. District Court Judge Frem Nielsen today and plead guilty to some of the bank fraud charges as part of a plea bargain, authorities said Tuesday.

Hughes appeared Monday before U.S. Magistrate Judge Cynthia Imbrogno for an arraignment on the new indictment.

That hearing was a formality to advise her of the charges, the potential penalties and to make sure she had legal representation.

Local journalism is essential.

Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are tax deductible.

Meet Our Journalists

Jesse Tinsley

Meet Jesse Tinsley. As a certified drone pilot, this veteran Spokesman-Review photographer often can be seen capturing beautiful aerial photographs of our region. Sometimes though, the job requires getting down with the dogs.
Jim Meehan

Jim Meehan is no stranger to Zag Nation. As the lead writer covering the Gonzaga men’s basketball team, he tells the stories behind the game and gets fans a bit closer to their favorite players.
Molly Quinn

There is no artist in Spokane like Molly Quinn. Her whimsical style is instantly recognizable to readers of The Spokesman-Review. She has painted gorgeous illustrations that instantly elevate the journalism accompanying it. She brings to life the stories that defy photography. She makes our pages better.
Rob Curley

Spokesman-Review editor Rob Curley loves to talk with people and learn about their lives, whether it's a best-selling author or a stranger he meets downtown on his walk to lunch. It's that inquisitive nature combined with a playful sense of storytelling that helps make our newspaper different than most.