Reacting to unspecified “positive developments,” the Santa Cruz County Board of Supervisors voted on June 9 to take legal action “in all litigation matters related to the embezzlement by former County Treasurer Elizabeth Gutfahr, including but not limited to appeals of recent decisions and refiling a complaint against the Auditor General.”
The vote was held following an executive session to discuss the county’s legal options. John Fanning, board chairman and supervisor for District 3, which includes eastern Santa Cruz County, said he was not at liberty to discuss the details of what was discussed, but “coming out of that meeting, I’m confident that based on recent activity at the state court level, we will reap positive benefits for the County and districts negatively affected. In the long run, I’m optimistic it will be a positive outcome financially.”
Robert May, civil bureau chief for the county attorney’s office, told the supervisors “there are some new avenues that are opened up now.”
The lawsuit against the Auditor General alleged gross negligence on the part of Auditor General Lindsey Perry in not discovering approximately $38.7 million in county funds embezzled by Gutfahr over a 10-year period. The suit, filed in November 2024, contends that the state’s annual audit of county funds should have discovered the embezzlement, and therefore the state is liable for reimbursing the county.
The county’s suit was declared null and void by Maricopa County Superior Court Judge Dewain D. Fox due to a violation of the state’s Open Meetings Law, since the county failed to hold any public meetings to vote on initiating legal proceedings related to Gutfahr’s actions.
Gutfahr pleaded guilty and was sentenced to 10 years in prison, followed by three years of supervised release, and ordered to pay more than $51 million in restitution. According to court documents, she transferred public funds earmarked for school districts and fire departments to fake companies she had created and then used the money to purchase real estate, renovate her family ranch, pay expenses for her cattle business and buy at least 20 vehicles.
Her assets are being held in receivership and being sold off to make restitution. According to the Arizona Republic, the receiver has recovered approximately $7 million through the end of February. A ranch house in Tumacocori listed at $4.9 million and a Tucson condominium listed at $269,000 are still on the market.