Former Santa Cruz County Treasurer Elizabeth Gutfar pleads guilty in federal court

TUCSON, AZ (13 News) – Former Santa Cruz County Treasurer Elizabeth Gutfar pleaded guilty to three felony charges in federal court on Thursday, November 21st.

Gutfar was accused of stealing nearly $40 million from the county over a decade and was also convicted of embezzlement, money laundering and tax evasion.

Her sentencing was set for Feb. 6, 2025, and she agreed to repay the money to the county. The bankruptcy trustee set up when the case began said they believed they would only be able to recover one-third of the funding.

Civil cases have been filed against Gutfar in Santa Cruz County. It is unclear how the plea deal will affect civil cases. But the district has already filed a lawsuit against the state of Arizona, accusing it of lack of oversight.

The news spread quickly in Nogales and 13 News was able to speak with a local resident and a county official.

“I feel bad for her, but I also think she should have known better,” said Santa Cruz County resident Elvia Rodriguez.

In court Thursday, Gutfar admitted she stole the money and used it to buy real estate, run her ranch and cattle business, renovate the ranch and buy at least 20 cars, as well as for personal expenses.

Rodriguez said she places some of the blame on the county.

“Our district leaders should do a better job of keeping track of our money,” she said.

Santa Cruz County Board of Supervisors Chairman Manny Ruiz said the county has already begun working internally to change the way it handles public money, but said much of that responsibility should fall to the state Legislature.

“When you don’t have the whole picture in front of you, that’s when these things happen,” he said. “At the end of the day, it is the Legislature that determines the responsibilities of each elected official, and hopefully they can put some mechanisms in there that will strengthen the board’s ability to provide better checks and balances. from the one who is the treasurer.”

You can view the plea agreement below.

Previous coverage of this story is below and in the video player.

The Arizona Auditor General has released a financial investigation into the disappearance of nearly $40 million from Santa Cruz County accounts.

In April 2024 County Treasurer Elizabeth “Liz” Gutfar resigned after several financial irregularities were discovered.

In August Gutfar was accused of receiving almost $40 million for personal use.

According to the AAGO investigation, from March 2014 to March 2024, Gutfar made at least 182 “unauthorized money transfers from two county accounts to business bank accounts associated with her.”

“To conceal his actions, the Treasurer allegedly failed to record her unauthorized wire transfers in the County Treasurer’s accounting system and lied and/or provided numerous false investment statements, cash reconciliations and Treasurer reports to County entities, officers and employees; county financial consultant; and/or the Arizona Auditor General,” the AAGO said.

AAGO also made nine recommendations to county officials to “improve internal controls over public money and help deter and detect fraud.”

The Arizona Legislature was also given two recommendations to “consider revising the statute to provide the Authority with direct access to financial institution records and to require newly elected or appointed county treasurers and chief deputy treasurers to meet minimum training requirements.”

AAGO said Gutfar bypassed internal controls and made bank transfers.

“The Principal Deputy Treasurer told us that the Treasurer requested her password and access to her token-based multi-factor authentication device, reportedly so the Treasurer could transfer money to a Wells Fargo investment account that was offering a better interest rate than LGIP (local) State Treasurer. State Investment Pool),” AAGO writes in its report. “As a result, the Treasurer and the Principal Deputy Treasurer shared their passwords with each other and retained access to their token authentication devices. By circumventing these internal controls, the Treasurer created a way to repeatedly make unauthorized bank transfers from County Treasurer accounts on her own without being detected.”

The report said Gutfar may have provided other county employees with loans and gifts from the stolen money.

“Some of these employees admitted to us that they received personal financial assistance or gifts from the treasurer,” AAGo wrote. “In particular, the deputy chief treasurer reported that she received a “loan” from the treasurer in the amount of 6 thousand dollars for a new air conditioner and intends to repay the “loan” after retirement. The Chief Deputy Treasurer also told us that she received a car from the Treasurer for the use of her sister, which she valued at $3,000, and since 2019 or 2020 the Treasurer has been paying for her personal cell phone.”

The senior secretary told AAGO that Gutfar “paid her personal bills from time to time, gave her children $100 for their birthdays, and gave the senior secretary $1,500 for her own birthday.”

The tax official stated that Gutfar “gave her son a generous gift when he got married” and that Gutfar hosted her daughter’s wedding at her ranch. She also said that she and Gutfar traveled together to San Carlos, Mexico.

In a statement, the Santa Cruz County Board of Supervisors released the following statement:

“We are deeply disappointed that the Arizona Auditor General chose to release a purported report in a transparent attempt to minimize its responsibility for allowing former Santa Cruz County Treasurer Elizabeth Gutfar to continue unchecked to steal nearly forty million dollars over a decade rather than work constructively partner with Santa Cruz County to make its citizens whole.

In reviewing the Auditor General’s negligence in this matter over the past ten years, it is apparent that the office has failed to use basic accounting auditing principles in its oversight of the Santa Cruz County Treasurer. So the Auditor General’s real motive in issuing this “report” is clear: to deflect responsibility for the Auditor General’s own failures.

Last week, on August 19, 2024, the county filed a Notice of Claim with the Auditor General outlining the agency’s fault for failing to identify Ms. Gutfar’s wrongdoing and failing to follow basic accounting principles. In response to the County’s lawsuit, the Auditor General has rushed to release this purported “investigative report” which is clearly intended to divert attention from the Auditor General’s failures in overseeing Ms. Gutfar.

It should be noted that the Auditor General’s cover letter for the purported report clearly states that it was not made on the basis of general accounting principles (as have audits over the last decade) and that third parties should not rely on the reliability of the report. Additionally, the report was issued without consultation with County staff, which is contrary to the Auditor General’s established practice of first meeting with any government agency they are auditing to ensure the agency, in this case the County, has the opportunity to object to the factual findings and be able to respond to the recommendations.

The fact that this long-standing practice has not been followed here is just another example of how the Auditor General is failing in its core audit responsibilities and attempting to avoid financial responsibility to the citizens of Santa Cruz County. The County intends to file a lawsuit against the Auditor General through the court system and allow a jury to determine the extent of the Auditor General’s liability for failure to perform his duties to the citizens of Santa Cruz County.

The County also demands that the Auditor General retract his self-serving and misleading report.”

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