ODOT worker who filched $6M from state gets 12 years in prison; 3 others sentenced

The prime mover in a $6 million conspiracy to hawk Oregon Department of Transportation chainsaws on eBay was sentenced Friday to 12 years in prison after covering his tracks for more than 15 years.

John W. Tipton, 61, pleaded guilty to 36 charges, including first-degree aggravated theft, computer crime and official misconduct.

Tipton spent the money on pricey BMW cars, remodeling his home in Lake Oswego and on vacations in Europe, said Senior Deputy District Attorney Rusty Amos.

Beginning in 2004, Tipton used state credit cards to buy Stihl blades and other chainsaw parts from a half-dozen suppliers in Portland and Gresham – sprinkling the ill-gotten goods among legitimate purchases – then auctioned them off surreptitiously, prosecutors said.

The scheme came to light in January 2020 after Tipton was accused of workplace harassment and administrators began an unrelated investigation at the Lawnfield Maintenance Station in Clackamas.

“ODOT put their full trust in him, and unfortunately too much trust,” Amos said. “If someone hadn’t come forward, Mr. Tipton would probably still be stealing.”

Tipton had previously spent a year in prison after being convicted of credit card fraud in the late 1990s, court records show.

In 2013, Tipton approached his boss, then-landscape manager Frank C. Smead, because the manager was facing money troubles, Amos said.

“They went out to coffee and he said, ‘Hey, this is foolproof,’” Amos said in an interview.

Smead began signing off on some of the bogus purchasing memos. The duo clued in policy analyst Autumn S. Arndt in 2016.

Tipton continued to make the unnecessary purchases, Amos said, but shared some of the stolen equipment with his accomplices, who resold it themselves. Smead tasked his wife, Marta, with the job of running their eBay account.

After uncovering financial discrepancies, investigators obtained GPS records from Tipton’s ODOT truck and covertly watched him as he bought saw parts and then returned to work empty-handed. A stakeout of Tipton’s home revealed he would unload the saw parts into his garage or left them at a storage container in Sherwood.

“These are not master criminals, but (the surveillance) was very effective to definitively confirm that he was stealing,” said Detective Alex Monarch, who investigated the case for Oregon State Police.

ODOT ultimately identified $7.8 million in excessive spending linked to the Lawnfield Maintenance Station, but couldn’t determine if some purchases were illegitimate because the state agency regularly failed to track when supplies were transferred between its shops, according to Amos. Investigators believe at least $6 million of the purchases were phony.

Ebay records show Tipton made $850,000 selling saw parts on a discount between 2009 and 2020, while the Smeads earned $345,000 and Ardnt about $170,000.

All four defendants turned to apologize to a crowd of stony-faced ODOT workers sitting in the courtroom gallery during the two-hour proceeding.

“I am totally sorry for my greed. I ruined my trust with you,” Tipton said.

Through tears, Ardnt said: “The violation of the trust to the public that I have caused – forgive me for it.”

All three employees resigned by October 2020 after ODOT announced they were being investigated for theft.

Presiding Clackamas County Circuit Judge Michael Wetzel found Tipton eligible for time off for good behavior, earned time off, credit for time served and transitional leave, but declined to allow him to participate in alternative incarceration programs, noting his prior conviction.

The judge permitted all possible sentence reduction programs and alternative incarceration for the other three defendants. Transitional leave allows inmates to spend the last four months of their sentence in a halfway house, while alternative incarceration programs generally allow rehabilitation outside the prison walls for an additional few months.

“You’re an adult and responsible for your actions,” Wetzel told several of the defendants.

Frank Smead, 60, was sentenced to seven years in prison after pleading guilty to 27 counts, including aggravated theft, official misconduct and computer crime. Arndt, 42, was sentenced to five years in prison after admitting guilt to 27 charges.

Marta M. Smead, 60, pleaded guilty to 13 counts including aggravated theft and computer crime and was sentenced to 3½ years in prison.

The defendants were then led away from the courtroom in handcuffs.