Washington's Largest Internal Fraud in 15 Years: $878,115
Summary
A single Management Analyst at Washington's Office of Administrative Hearings -- the agency that hears disputes between citizens and the state -- used four fabricated vendor businesses to bill the agency's own credit cards $878,115 over four years, the State Auditor's Office found. No one reviewed his monthly statements independently, and no one else could even see the account online. He is now serving 18 months in federal prison; the state is still trying to get the money back.
One person, every role
The mechanism was not complicated. The Analyst was OAH's designated purchase-card custodian: he oversaw card use, collected receipts, reconciled monthly statements, and prepared the payments to the credit card company. The companion Accountability Audit Report (No. 1035188)⧉ found that no one in Agency management independently reviewed those reconciliations. He was the only employee with online access to the credit card account. And the same accounting-system permissions let him both prepare and release batch payments -- meaning the two duties a basic control structure is built to separate, initiating a payment and approving it, sat with one person. When a colleague did review his monthly statements, the Analyst handed over only selected pages rather than the full statement, concealing what he didn't want seen.
View data as table
| 2019 | 51,903 | Scheme began June 14, 2019 -- partial year |
|---|---|---|
| 2020 | 251,485 | First full year of the scheme |
| 2021 | 96,574 | Lowest full-year total; the fourth and largest fake business opened this year |
| 2022 | 293,792 | Highest single year -- more than three-quarters of it ran through the fourth fabricated business alone |
| 2023 | 184,361 | Through May 11, 2023, when the scheme was caught during a routine audit |
The scheme scaled with the opportunity
The four fake vendors were not used evenly. Business 4, opened in 2021, alone carried $529,051 of the total -- 60 percent of everything stolen -- and by 2022 it was doing more damage in a single year ($293,792) than the first two businesses combined had done across three. Businesses 2 and 4 together account for 89 percent of the loss; Business 1 and Business 3, by contrast, appear to have been minor or abandoned experiments. A skeptic reads that pattern as confidence, not chaos: whatever the Analyst tested against the agency's review process in 2019 and 2020 evidently worked well enough that he committed more to it each year after.
View data as table
| Business 1 | 29,380 | Used only in 2019 |
|---|---|---|
| Business 2 | 256,383 | Used 2019-2021 |
| Business 3 | 45,943 | Used 2020-2021 |
| Business 4 | 529,051 | Used 2021-2023 -- alone accounts for 60% of the total loss |
| Personal charges | 17,359 | Gift cards and the Analyst's personal cellphone bill, charged directly |
The reckoning, so far
The Analyst resigned on June 30, 2023, five weeks after auditors first flagged an unrecognized vendor during a routine review. The Agency filed a report with the Olympia Police Department, the State Auditor's Office said it would refer the case to the Thurston County Prosecuting Attorney's Office, and its report recommends OAH pursue recovery of the full $878,115 plus $116,000 in investigation costs -- money the state must now spend a second time, this time to chase the first loss.
Separately, the U.S. Attorney's Office for the Western District of Washington pursued a federal case: the man was identified in an IRS Criminal Investigation press release⧉ as Matthew Randall Ping, who executed 210 separate transactions through the fabricated accounts. He pleaded guilty in June 2025 to wire fraud and filing a false tax return -- the stolen income itself had gone unreported, adding a $240,247 federal tax loss on top of the underlying theft -- and on September 11, 2025, Judge Tiffany M. Cartwright sentenced him to 18 months in prison and three years of supervised release. Restitution was set at $1,118,362, which is exactly the $878,115 owed the state plus the $240,247 owed the : two separate legal proceedings, on two separate sets of facts, arriving at the same arithmetic.
None of this required a large agency to fail. OAH's total fiscal year 2022 spending was about $31.9 million, of which credit card payments were a comparatively small $402,470 -- a rounding error against the state's budget, run by four fiscal-department employees under one . What failed was not scale; it was the absence of a second set of eyes on one recurring, ordinary process. The auditors' recommendations read, appropriately, as unglamorous: require independent review of monthly reconciliations, separate who prepares a payment from who releases it, make sure more than one person can see the statements. OAH says it has adopted all of them, including hiring a fourth fiscal analyst specifically to restore that separation of duties. Whether that holds is not something a report published the same week can tell a reader; it is something the next audit will.
- One credit card custodian moved $878,115 through four fabricated vendor businesses over roughly four years (June 2019-May 2023) -- the largest internal misappropriation Washington's State Auditor has found in a state agency in at least 15 years.
- The failure was structural, not technological: no independent review of monthly reconciliations, sole access to the online account, and the ability to both prepare and release payments all sat with one employee.
- The scheme scaled over time. One fabricated business, opened in 2021, alone carried 60% of the total loss; two of the four businesses together account for 89%.
- Recovery is not resolved. Auditors recommend the state pursue the full $878,115 plus $116,000 in investigation costs from the former employee or the agency's insurance bond; separately, a federal court ordered $1,118,362 in restitution (the state's loss plus a $240,247 tax loss) alongside an 18-month prison sentence.
Figures are drawn from three Washington State Auditor's Office documents published July 1, 2024 -- the Fraud Investigation Report (No. 1035189), the Accountability Audit Report (No. 1035188), and the Auditor's Office's own announcement of the findings -- all read in full via direct PDF/HTML fetch from sao.wa.gov and portal.sao.wa.gov, with same-day Wayback captures confirmed. Sentencing and federal-case details come from an Criminal Investigation press release (irs.gov), read directly after the U.S. Department of Justice's own release on the same case returned a bot-detection interstitial that blocks non-browser fetches; the account was cross-checked against independent news coverage of the same September 2025 sentencing (KOMO, KIRO 7, King 5, Washington State Standard) and its state-side loss figures match the audit exactly. A blind adversarial verifier, working from the primary documents alone with no access to this draft, independently checked every itemized fact; see verification.json.
The 60% and 89% shares of the loss by fabricated business, the 13.2% investigation-cost ratio, and the restitution reconciliation ($878,115 + $240,247 = $1,118,362) are this outlet's own arithmetic on figures the source documents state separately (methods and caveats in analysis.json). Note also that the audit's own year-by-year and business-by-business tables carry a $1 internal rounding discrepancy (component rows sum to $878,116 against a stated total of $878,115); this piece uses the audit's own stated total throughout.
Sources(4) ▾
- Office of the Washington State Auditor, Fraud Investigation Report -- Office of Administrative Hearings (Report No. 1035189) (2024-07-01) — The State Auditor's special-investigations report is the sole source for the core misappropriation finding: $878,115 embezzled by a Management Analyst between June 14, 2019 and May 11, 2023 via four fabricated vendor businesses and personal card charges, plus $4,933 in questionable charges from July 20, 2017-March 13, 2018; the year-by-year and business-by-business breakdown tables (pp.3-4); the internal-control weaknesses that allowed it (p.5); the recommendation that the Agency pursue recovery of $878,115 plus $116,000 in investigation costs (p.6); and the referral to the Thurston County Prosecuting Attorney's Office (p.3). portal.sao.wa.gov · original document
- Office of the Washington State Auditor, Accountability Audit Report -- Office of Administrative Hearings (Report No. 1035188) (2024-07-01) — The companion accountability audit (period July 1, 2018-June 30, 2022) independently restates the $878,115/$4,933 figures as Finding 2022-001 and supplies the agency-scale context used to size the loss: about 120 administrative law judges and 110 support staff, roughly $31.9 million in fiscal year 2022 spending including $402,470 in credit card payments (p.5), and the specific control failures -- no independent review of the Analyst's monthly reconciliations, sole access to the online credit card account, and unsegregated ability to both prepare and release batch payments (p.5). portal.sao.wa.gov · original document
- Internal Revenue Service, Criminal Investigation, Former Washington State Employee Sentenced to Prison for Embezzling Nearly $900,000 (2025-09-12) — The federal criminal case against the former Management Analyst, Matthew Randall Ping, is the source for: his identity and job history at OAH; the 210 transactions executed through the fabricated vendor accounts totaling $860,756 in state losses (matching the state audit's business-by-business table); his guilty plea (June 2025) to wire fraud and filing a false tax return; his sentence of 18 months in prison plus 3 years of supervised release, handed down September 11, 2025 by Judge Tiffany M. Cartwright in U.S. District Court in Tacoma; the separate $240,247 federal tax loss from underreporting the stolen income (2020-2023); and the total restitution ordered, $1,118,362, covering the state, its insurer, and the . irs.gov · original document
- Office of the Washington State Auditor, Auditors find nearly $900,000 misappropriation at Office of Administrative Hearings (2024-07-01) — The Auditor's Office's own announcement of the fraud report, published the same day as the two audit reports, is the source for State Auditor Pat McCarthy's characterization of the case: 'the largest internal misappropriation in a state agency in at least the last 15 years.' sao.wa.gov · original document
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Trust a system's controls, not its people, and you rarely get surprised. Washington's Office of Administrative Hearings (OAH) -- the independent agency whose 120 judges rule on disputes between residents and the state, from unemployment claims to public-assistance denials -- learned that the hard way. A Fraud Investigation Report from the Washington State Auditor's Office⧉ found that between June 2019 and May 2023, a single Management Analyst -- the agency's own credit card custodian -- funneled $878,115 of public money through four businesses he invented and registered himself. State Auditor Pat McCarthy called it the largest internal misappropriation in a Washington state agency in at least 15 years⧉.