Santa Cruz County embezzlement investigation report released

SANTA CRUZ COUNTY, Arizona — Associates of the former Santa Cruz County treasurer say their boss gave her generous cash gifts before she resigned and was accused of embezzling millions of dollars, according to a new report.

Elizabeth Gutfahr, who resigned from elected office earlier this year, is being sued by the small Arizona county for allegedly transferring money from the county's savings accounts to corporate or bank accounts she controlled.

A report released Monday by the Arizona State Auditor General's Office provides further insight into how the former treasurer allegedly lied to her staff and falsified reports to cover up the embezzlement.

The treasurer is suspected of having made over 180 unauthorized transfers totaling $39 million over a period of 10 years. And she is said to have done so without the six employees in her office knowing anything about it.

According to the audit report, the treasurer's employees admitted to receiving financial assistance and gifts from their boss.

One employee said the treasurer would pay their bills from time to time and give their children $100 for their birthdays. Another employee told investigators the treasurer gave them a car and paid for their personal cell phone.

The former treasurer allegedly managed to circumvent an internal control by convincing her deputy to share her electronic transfer password because the employee had been told the treasurer wanted to transfer money to a Wells Fargo account that offered a better interest rate than the Local Government Investment Pool, the report said.

The deputy chief claims to have questioned the treasurer once in 2021 about a $225,000 transfer. The treasurer claimed the transfer was made in error and assured that the money would be refunded. Auditors allegedly found that the money was never returned to the county treasurer's office.

“…no one else supervised the treasurer or monitored her activities, although the county supervisor was responsible for doing so,” the audit report states.

The auditor emphasized that “false and irregular” monthly financial reports were submitted to the district board and the district finance department “without any discernible consequences.”

You can read the rest of the audit report here.