The nature of wave resources usually requires wave energy converter (WEC) components to handle peak loads (i.e., torques, forces, and powers) that are many times greater than their average loads, accelerating equipment degradation. Moreover, due to their isolated nature and harsh operating environment, WEC systems are projected to possess high operations and maintenance (O&M) cost, i.e., around 27% of their leveled cost of energy. As such, developing techniques to mitigate these costs through the application of condition monitoring and fault tolerant control will significantly impact the economic feasibility of grid connected WEC power. Toward this goal, models of faulty components are developed in the open source modeling platform, WEC-Sim, to estimate the performance and measurable states of a WEC operating with likely device and sensor failures. Two types of faulty component models are then applied to a point absorber WEC model with basic controller damping and spring forces. Resulting changes in device behavior are recorded as a benchmark, and a graph-theoretic approach is proposed for fault detection and identification utilizing multivariate time series. Simulation results demonstrate that these faults can greatly affect the WEC performance, and that the proposed method can effectively detect and classify different types of faults.