BY THE PROSECUTORS'S reckoning, Millie Padua left the Pike Place Market each afternoon with $200 of other people's money. On average, she was to have done this five days a week, 50 weeks a year, for 35 months.
As the longtime, likable market master, Padua collected funds from day stall renters and gave them printed receipts. She then used her eraser to change her copy of the receipts and put some of the money in her pocket, the prosecutor thinks. Through this daily routine, Padua allegedly walked away each year with $57,000 in cash.
No one noticed.
"She would love to hear how this was done and where the money went," says her attorney Michael Schwartz. "Then she'd know, too."
The felony charge filed by the King County Prosecutor's Office last week accuses Padua, 72, of persistent and mysterious first-degree theft. As collector of day rents for most of her 25 years with the market, she allegedly took advantage of an antiquated manual accounting system to steal at least $171,000 from January 1996 through November 1998.
She denies the charge. She has twice—once 18 months ago, then again three weeks ago—turned down offers by the prosecutor to admit guilt through a plea bargain.
Prosecutors have studied the case for two years and are relying essentially on the information they obtained in 1998 during a critical audit of the market's hand-kept records and casual cash-handling system.
"I like the prosecutor's office," Schwartz says. "So I really hope this doesn't turn out to be some tremendous political push from the market to settle old scores and wrap up this business. I honestly do not know, nor does Millie, why she became the target of this."
During the three years in question, Padua, a widow, deposited $64,000 in cash into her bank account, says the prosecutor's office. Another $12,000 in cash payments were made to her credit cards.
"She sold household possessions. She took cash from her credit card and deposited it to cover her checking account," says Schwartz. "There are many explanations."
But Schwartz also notes the prosecutor fails to account for almost $100,000. "That's the thing," says Schwartz. "If this charge was true, where's the rest of the money? She has no luxury cars, no big TVs, stereos. She's not living large. She is an elderly woman existing on Social Security and a few bucks she makes at the market."
Fired from her market master job two years ago, Padua now works a few days a week in a Pike Place card shop. In the politically balkanized market, which chooses sides over imported lettuce, she has her believers and detractors.
"I understand she gambles in Reno," said one detractor last week at Lowell's bar in the market.
"So maybe she won, and that's where the cash came from," said a supporter.
Neither had any idea if this was true. But Millie Padua had been charged that day. She must be guilty of something, right?
That's the other thing, says attorney Schwartz. "Is any money really missing?"
Two years ago this month, Shelly Yapp, then the executive director of the market's Preservation and Development Agency (PDA), claimed Padua had been pocketing the rental cash and sent her packing. An audit by an outside CPA firm, Branch, Richards & Co., claimed as much as $300,000 had been looted since 1992.
Auditors pointed to Padua as the thief. Although she is now charged with taking about half that amount over three years rather than seven, it is essentially that forensics audit that led to last week's charge.
The auditors had to presume Padua's role. After it was collected, the rental money was kept in an unlocked box in an unlocked room, which, the audit noted, was accessible by many.
Actually, auditors found the accounting and cash receipt system in such disarray they couldn't be precise about how much might be missing. They were also puzzled why the faulty accounting system remained unfixed for so long.
Branch Richards cited documents, which had long been available for the PDA's review, that could have alerted the higher-ups there were problems in the accounting system: Day stall attendance sheets, cash deposit journals, and cash receipt books from previous years.
"The accounting was incredibly lax," says Schwartz. "No one had to change [or erase] receipts—it wasn't necessary. The procedures were so unprofessional. Yet it went on year after year."
It turned out the PDA had been warned of the problem five years earlier in 1993 by the market's regular auditing firm, Francis & Co., but had taken no corrective action. The auditors had advised the PDA to "develop policies and procedures to cover all aspects of cash management," including "safekeeping procedures."
Branch Richards reiterated that advice in the 1998 audit, again urging the PDA "to further strengthen the internal controls surrounding the cash receipt process."
How, asks Schwartz, "do you lose $50,000 a year and not even know it's missing? Who's responsible?"
As of last week, it was his client.
"We'll have to hire our own forensics accountant to go over everything," Schwartz says. "For all anyone knows, this may just be some bizarre accounting mistake."