A former state employee was sentenced to 18 months in federal prison on Thursday for stealing nearly $900,000 in taxpayer money over four years to fund his destructive gambling habit.
Matthew R. Ping, who used his position at the Office of Administrative Hearings to funnel state credit card payments to fake businesses he created, was sentenced on one count of wire fraud and one count of falsifying a tax return. He pleaded guilty to the charges in June.
The prison sentence imposed by U.S. District Judge Tiffany Cartwright was less than the 33 months recommended by federal prosecutors, but more than the five years of supervised release sought by Ping's attorney.
Cartwright also ordered Ping to serve three years of supervised release after finishing his time in prison and to pay nearly $1.2 million in restitution.
Ping's theft was the largest such embezzlement by a state employee since at least 2009, according to the state auditor's office, which discovered the fraud during an audit two years ago.
Sitting next to his federal public defender, Lindsay McCaslin, Ping read a statement Thursday apologizing to his former co-workers, including some who were in the courtroom, before his sentencing.
From the bottom of my heart, I am truly sorry," Ping said, saying the shame he felt "will never go away."
Ping spent much of his statement detailing his gambling addiction, which he said was encouraged by a "predatory" casino industry that encouraged his out-of-control wagers with perks including $1,000-a-week gambling credits and tickets to Seahawks and Kraken games.
When he tried belatedly to seek help, calling the state's problem-gambling hotline, Ping said he was directed to a call center that gave him phone numbers for medical clinics that could offer appointments only months later.
McCaslin, asking for no prison time for Ping, said his thefts from the state were undoubtedly serious, but were driven by his gambling compulsion and not greed.
Cartwright expressed some sympathy for Ping's addiction and a comparative lack of resources for gambling problems when compared with drugs and alcohol rehab.
Still, Cartwright said, a prison sentence was appropriate given Ping's betrayal of the public trust, saying there needs to be a deterrent for people who steal from the state.
Assistant U.S. Attorney Dane Westermeyer acknowledged Ping's gambling addiction and credited steps he'd taken to accept responsibility, but asked for a lengthier prison sentence, noting Ping only seriously sought help for his addiction after his fraud had been exposed.
Westermeyer noted that Ping continued to steal money from the state even during the months in 2020 when casinos closed due to COVID.
Ping carried out his crimes using inside knowledge at the Office of Administrative Hearings, a relatively small state agency that runs hearings for people challenging government decisions on issues including unemployment claims and child-support payments.
A management analyst who was paid $82,500 a year, Ping was designated as the "credit card custodian" for the agency — a role he abused "to enable his fraud and hide the scope of his theft," federal prosecutors said in charging documents.
He created fake businesses and charged the state hundreds of thousands of dollars, prosecutors said. To hide his crimes, he manipulated internal accounting records so co-workers wouldn't see suspicious transactions.
In all, prosecutors said, Ping "secretly executed" 210 fraudulent credit card payments of at least $860,756 between 2019 and 2023. He also directly charged $17,359 on state credit cards for personal purchases.
Ping's scheme started, federal prosecutors said, after he'd overdrawn his personal checking account to a balance of -$27.03 at various Western Washington casinos.
He then "funded his lifestyle by stealing from Washington taxpayers," according to a sentencing memo filed last week by the U.S. attorney's office.
Ping started out buying five $500 Visa gift cards for himself in June 2019 using a state credit card.
"That was merely the beginning. After this first successful theft and the cash flow that came with it, Ping's gambling exploded," prosecutors wrote in the sentencing memo.
That July, Ping withdrew more than $20,750 at four Washington casinos, again draining his bank account.
So he started stealing more money, inventing four fictitious business vendors and directing state money to them through two online payment processing companies.
"He used this stolen taxpayer money to fuel his gambling habit, fund at least six trips to Las Vegas, pay off a luxury vehicle loan, and otherwise support his lifestyle, the prosecution sentencing memo said.
Meanwhile, unsurprisingly, he did not report the stolen money to the IRS, evading nearly $250,000 in federal taxes.
The nearly $1.2 million in restitution Ping was ordered to pay will go to the state, its insurer and the federal government.
Ping has a history of earlier financial problems, including personal bankruptcies in 1999, 2005, 2012 and 2018, according to court records which showed other evidence of a long-standing gambling habit.
Ping's fraud went on for nearly four years and came to light after the state auditor's office started a routine accountability audit in May 2023.
As part of that probe, auditors asked for documentation on some of Ping's credit card transactions. The next day, Ping abruptly took leave from work, claiming medical issues. He continued to dodge auditor and co-worker questions about the payments and resigned a few months later.
The state audit report, published last July, faulted the Office of Administrative Hearings for failing to have more internal safeguards in place to stop a single dishonest employee from misappropriating so much money.
In releasing the audit, state Auditor Pat McCarthy said last year she was “greatly concerned” by an “increasing boldness” of the misappropriations of public money “at all levels of government.”
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