Donna Lepley

A Yamhill County grand jury has indicted Donna Lepley, a former employee of Newberg's Johnson Furniture, on 15 charges stemming from her alleged embezzlement of more than $100,000 from the business over a four-year period.

The grand jury indicted the 58-year-old Lepley, a Carlton resident who once served as city clerk in Lafayette under the name Donna May, with eight counts of first-degree aggravated theft, four counts of first-degree theft and one count each of first-degree forgery, identity theft and unlawful use of a computer, all felonies. She is lodged in the Yamhill County Jail on $50,000 bail.

Lepley, who left a trail of controversy behind her in Lafayette, was hired by the store in January 2006 to handle accounts payable, accounts receivable and payroll, according to owner Leonard Johnson. She was fired Dec. 10, after bookkeeping irregularities came to light and were traced back to her.

Newberg-Dundee police were notified and an investigation headed by Detective Eric Ronning was launched. That led eventually to the filing of charges.

Lepley wrote checks to herself and an accomplice, according to Sgt. Tim Weaver. He said she wrote 81 checks for about $50,000 in 2007, another 71 for about $50,000 in 2008 and 21 for about $12,000 in 2009.

In all likelihood, he said, there are more unauthorized checks and/or misappropriated funds yet to be accounted for. He said the grand total could run as high as $130,000.

Weaver said detectives turned up evidence that Lepley has a gambling problem. She previously worked at the Spirit Mountain Casino.

Lepley first became embroiled in public controversy in the late 1990s, stemming from her city clerk employment in Lafayette. It began in January 1997, when she filed a claim with the state Bureau of Labor and Industries alleging sexual harassment at the hands of City Administrator Mark Gervasi.

Gervasi resigned later that year to take a job as city manager in Tillamook, where he remains today. Lepley was one of three finalists to replace him, but the city council voted 3-2 in favor of Bob Willoughby.

Willoughby spent three years in Lafayette before leaving to become city manager in Cascade Locks. He is currently serving as city manager in Florence.

In 1998, Lepley left to take a job with the casino. The next year, she filed a federal lawsuit against Gervasi and the city.

In her legal action, Lepley sought more than $800,000 in economic damages, punitive damages and medical reimbursement. She claimed she had been subjected to unwanted sexual comments by Gervasi, then to retaliation after filing a BOLI complaint.

The BOLI complaint was ultimately dismissed. When the lawsuit was subsequently tried in U.S. District Court in Portland, a jury of seven women and one man cleared both the city and Gervasi of any wrongdoing.

At trial, Gervasi's attorney called witnesses who questioned Lepley's recordkeeping. An accountant the city hired when Lepley resigned in 1998 testified she found the city's books in a state of disarray.

The accountant said some checks issued by the city had never been entered into the books and documentation was missing for some of the city's bank deposits. She said she didn't see how city accounts could be balanced, given the problems and discrepancies.

On three occasions in 1998, Lepley had taken payroll advances of $1,000 or more, the accountant testified. Lepley had later received full paychecks, the accountant said, but had failed to fully reimburse the city, sticking it with a deficit of about $900.

The accountant also testified that Lepley had accepted more than $400 in collect calls from a son in Montana, and there was no record of any reimbursement to the city for that.

The furniture store was founded in 1948 at its present location, 206 E. First St. Johnson's parents ran the business initially, then turned it over to Johnson and his brother.

Since 1996, Johnson has operated it with his wife, Chris, and their sons, Erik and Scott. He said Lepley's actions had been devastating to all concerned.

Lepley is due back in court at 3 p.m. Monday, March 1, for a trial report conference. McMinnville attorney Majie Dodge has been appointed to represent her.