Former DNR Employee Accused of Years-Long Expense Fraud

A former state natural resources specialist has been accused of orchestrating an extended scheme to secure unearned reimbursements through forged hotel invoices and inflated per diem claims.

Kevin R. Peterson, 36, of Port Angeles, worked as a Forest Check Cruiser for the Department of Natural Resources. An internal review uncovered that he collected roughly $28,800 in public funds from January 2020 through June 2024, despite many of his claimed work trips never having taken place.

Initial Red Flag Sparked Investigation

The probe gained momentum in July 2024, when Peterson’s supervisor, David Hurn, observed Peterson’s state-issued pickup truck parked at his home on a weekday evening. At the time, Peterson was expected to be in Forks overseeing the Fish and Chips timber sale and had submitted travel documentation indicating an overnight stay there.

Hurn’s observation prompted a deeper look into Peterson’s prior travel submissions. Investigators later categorized the documentation as exhibiting a “cut and paste” approach to receipt fabrication.

Forensic Audit Reveals Systemic Inconsistencies

Eide Bailly LLP, retained by DNR for a forensic review, examined 70 hotel invoices submitted by Peterson. The analysis showed repeated anomalies:

  • A single credit card authorization number appeared on 68 of the 70 invoices, despite each transaction typically generating a unique code.
  • Checkouts consistently occurred at 10:50 a.m. across 66 of the invoices.
  • Room numbers were reused across multiple stays, with 67 entries referencing the same set of room identifiers.
  • External verification with hotel staff showed many stays could not be corroborated; at the Dew Drop Inn in Forks, only two of the 66 claimed visits were found in their records—one in October 2020 and another in March 2022.

State Auditor’s Final Findings

The Washington State Auditor’s Office released its investigation results on December 26, 2025, affirming the agency’s internal conclusions. The report detailed how Peterson claimed reimbursement for lodging and daily allowances tied to trips that left no paper trail at the properties.

According to the auditor’s summary, $16,364 was attributed to nonexistent hotel accommodations, while $12,444 stemmed from unearned per diem payouts. Additional irregularities included fuel purchases logged in Port Angeles and Sequim on dates Peterson reported being in Forks.

Termination Followed Extended Inquiry

Peterson was placed on paid administrative leave during the investigation and formally dismissed from DNR on February 11, 2025. He declined repeated outreach from both law enforcement and auditor staff, typically deferring to legal counsel before responding.

In a letter sent to DNR Regional Manager William Wells, Peterson acknowledged his ten years with the agency but did not directly address the substantiated discrepancies.

Statement Regarding Allegations

A person connected to the case stated they had no comment concerning the accusations leveled against them. In a written message, the individual expressed gratitude for the chance to walk across vast areas of Department of Natural Resources property, appreciate the surrounding nature, and record measurements of various trees during those visits.

Prosecutorial Review

Following the Sheriff’s investigation's conclusion in August 2025, Deputy Demorest requested that charges of Forgery (RCW 9A.60.020) and Theft in the 1st Degree (RCW 9A.56.030) be referred to the Clallam County Prosecutor’s Office.

The DNR has stated it is reviewing options to recover the stolen funds, as well as the $24,000 cost of the internal investigation.

Clallam County Prosecuting Attorney Mark Nichols told me that his office is “in receipt of this referral” and is “in the process of conducting a charging review.”

Nichols says his office has “not yet reached a decision on this case.”

A copy of the Probable Cause Report is available here.

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