The Santa Cruz County Board of Supervisors approved authorizing the retention of outside legal counsel for current and former county employees and their spouses named as defendants in a civil complaint filed by the Arizona Auditor General in relation to the embezzlement of county funds by former treasurer Elizabeth Gutfahr.
Robert May, civil bureau chief for the County Attorney’s office, called the complaint “one more example” of the Auditor General’s pattern of “filing frivolous litigation” and explained that because the employees were sued in their official capacities, the authorization of outside counsel is necessary to protect the county from increased legal risk and financial exposure.
“The employees were sued in their official capacity even though they were cleared by the FBI and Department of Justice of any wrongdoing in the Liz Gutfahr embezzlement,” May said at Wednesday’s meeting of the Supervisors.
The suit, filed in April in Maricopa County Superior Court, names former Chief Deputy Treasurer Maria Acuña, former Senior Secretary Gloria Patricia Ibarra and tax clerk Susan Gonzalez and their spouses as defendants, as well as Gutfahr, her husband, David, son, Davian, and niece, Ashley Moreno. Acuña, Ibarra and Gonzalez are accused of personally benefiting from Gutfahr’s crimes, and Acuña is alleged to have helped facilitate them.
Gutfahr pleaded guilty to embezzling approximately $38.7 million in county funds over a 10-year period and was sentenced to 10 years in prison, followed by three years of supervised release. She was also ordered to pay more than $51 million in restitution. Gutfahr is the only person who has been criminally charged in connection with the theft.
The county sued the Arizona Auditor General in 2024, claiming gross negligence in failing to discover the missing funds in its annual audits, and the state has responded with a series of cross complaints. The county’s original suit was declared null and void in March due to a violation of the state’s Open Meeting Law, but the county refiled in June along with a motion to consolidate all previous findings in the matter “out of the concept of judicial efficiency.”
“This new complaint is now another attempt by the Auditor General to avoid their own responsibility,” May said.
Gary Levine of Rio Rico was one of two citizens to speak against using public funds to defend the employees at Wednesday’s board meeting: “Consider the optics and the message that you would be sending to county residents, who, I can tell you from personal experience, already have a great level of mistrust of the integrity and honesty of our county government. You would be throwing gasoline onto the fire to now use their taxpayer dollars for those individuals.”
The measure was approved following an executive session of nearly 90 minutes. Board chairman John Fanning, who represents eastern Santa Cruz County, said he understood the public’s concerns, but “if we do not move forward in this direction, no action equals greater risk to the county.”
A press release issued by the county states: “Failure to take this action could expose the County to increased legal risk, greater financial costs and the potential expense of decisions based on incomplete or incorrect allegations. The Board’s action is intended to safeguard County resources and protect taxpayers from unnecessary financial exposure.”