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Spokane, Washington  Est. May 19, 1883

Cheney woman charged with embezzling $14,000 from memorial benefit fund

The bodies of Justin M. Luhr, Justin T. Honken and Caitlin A. Breeze were recovered from Lake Coeur d’Alene on Aug. 3 after a boating crash on July 30. Katie Rafter is facing charges of stealing about $14,000 from a memorial benefit fund set up by the families of Luhr and Honken. (Kathy Plonka / The Spokesman-Review)

Spokane County deputies arrested a Cheney businesswoman suspected of stealing money from a memorial fund set up to aid the families of two men killed in a July boating accident on Lake Coeur d’Alene.

The boat’s passengers, Justin Luhr, 34, and Justin Honken, 21, and a woman, Caitlin Breeze, 21, went missing after their boat collided with another on Lake Coeur d’Alene on July 30. Their bodies were recovered several days later.

On Oct. 8, the Luhr and Honken Memorial Benefit was held at the Kootenai County Fairgrounds, which raised about $30,000 that was to be split equally between the Luhr and Honken families, court documents state. It was a rodeo benefit and both men had been involved in rodeo events.

But before the money could be distributed, Katie Rafter, 36, who was head of the committee in charge of the memorial, siphoned about $14,000 from the fund and used the money to buy a tanning business in Cheney called Wildflower Boutique and Salon, according to court documents.

Another member of the committee who worked alongside Rafter provided Spokane County sheriff’s deputies with the memorial’s Inland Northwest Bank account information, which showed Rafter had made multiple deposits into her personal bank account at Washington State Employees Credit Union from October 2016 to January 2017, according to court documents.

The account information also showed that Rafter had taken out cashier’s checks payable to the owner of the tanning business.

When contacted by deputies, Rafter said she’d deposited the funds into her account “to pay debts and purchase a business,” court documents say. She told deputies that she mailed a cashier’s check to the Honken family to repay the debt and that she was “planning to offer Luhr 30 percent profits each month from her business in order to pay Luhr back,” court documents state.

Doug Honken, Justin Honken’s father, said he’s the one who discovered the theft. “I had a bad feeling about 90 days into it,” he said. “I hadn’t heard anything about it.”

He contacted the other person who had access to the fundraiser bank account, who provided bank records that showed Rafter had taken the money. Honken said he didn’t know Rafter and only met her the day of the rodeo fundraiser.

Sheriff’s Office spokesman Mark Gregory said the second person who had access to the account was extremely helpful. “Investigators don’t believe she was involved in any way,” he said.

Honken said he was destroyed by the death of his son and Rafter’s actions only added to his grief and he’s glad she’s been arrested. “It helps to know that she can’t hurt anyone else,” he said. “How can you steal from somebody who is already suffering beyond belief? That boy was the world to our family and that lady just slapped every one of us.”

He did receive a check for some of the proceeds from the event. Honken said he gave it to Luhr’s wife.

“She is trying to support two kids because her husband was killed,” he said. “We gave what money we got to her because it was the right thing to do.”

Honken said he appreciates how the rodeo community stepped up to help during the fundraiser. “I’d like to thank everyone for what they did for us,” he said.

On Monday, the Kootenai County Sheriff’s Office recommended criminal charges against Dennis D. Magner, the person who allegedly was driving a boat that crashed into a stationary boat occupied by Luhr, Honken and Breeze. The Sheriff’s Office said Magner and three of his passengers initially lied about who had been operating the boat, but the passengers later recanted.

Honken said he’s grateful for the hard work put in by the Kootenai County Sheriff’s Office and the Spokane County Sheriff’s Office.

Staff reporter Nina Culver contributed to this story.