Ex-mayor convicted in insurance fraud scheme

OLYMPIA -- A former Westport mayor and former state trooper has been convicted of involvement in a scheme to commit insurance fraud, a case involving a nonexistent 1949 Chevrolet Woody and a dead State Patrol sergeant.

Douglas Merino, 51, was convicted Monday by a Thurston County Superior Court jury of attempted first-degree theft and conspiracy.

Merino, a former fraud investigator for the state Department of Labor and Industries, faces a maximum sentence of more than a year behind bars, and the felony convictions could also cost him his State Patrol disability payments, Deputy Prosecutor Joseph Wheeler said

Defense lawyer Michael Frans had rejected an agreement in which Merino would have pleaded guilty to a reduction in charges that still involved a felony because of the potential loss of disability payments.

Testimony indicated Merino, Kenneth Ray Varner, 31, of Olympia, and Varner's father, former patrol Sgt. James Earl Varner of Olympia, were involved in a plan to collect $60,000 by saying a 1949 Chevrolet Woody had been stolen although no such car existed.

The younger Varner pleaded guilty to first-degree theft but has not been sentenced, and a warrant has been issued for his arrest because he has fled to Mexico, according to documents filed in court.

The elder Varner was found dead of a gunshot in a parked car west of Packwood on Feb. 1, 2006, a day after he was questioned by a fraud investigator for an insurance company about his Woody claim.

Merino had given the former patrol sergeant a signed title to the nonexistent car, according to testimony at Merino's trial.

Lewis County sheriff's Detective Matt Wallace has said the elder Varner's death is considered a homicide and remains unresolved.