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

Gutfahr was accused of stealing nearly $40 million from the county over a decade and admitted to embezzlement, money laundering and tax evasion.

His sentencing was set for Feb. 6, 2025, and he agreed to pay the money back to the county. The trustee installed when the case began said he thought he would only be able to recover a third of the funds.

There are civil lawsuits filed against Gutfahr by Santa Cruz County. It’s unclear how the plea agreement will affect the civil cases. However, the state had already filed a lawsuit against the state of Arizona for lack of control.

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

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

In court Thursday, Gutfahr admitted stealing the money and using it to buy real estate, run his farm and cattle operation, renovate the ranch and purchase at least 20 vehicles and personal expenses.

Rodriguez said he puts some of the blame on the county.

“Our district chiefs should have monitored our money better,” he said.

Santa Cruz County Board of Supervisors Chairman Manny Ruiz said the county has already begun internal work to change how public money is managed, but much of that responsibility should fall on the state legislature.

“When you don’t have the whole picture in front of you, that’s when things like this happen,” he said. “At the end of the day, it is the legislature that determines the duties of every elected official, and I hope they can put some mechanisms in place that will strengthen the board’s ability to get better checks and balances regardless of who the treasurer is.”

You can read the plea agreement below.

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

Arizona Auditor General releases financial investigation of nearly $40 million missing from Santa Cruz County accounts.

In April 2024, county treasurer Elizabeth “Liz” Gutfahr resigned following the discovery of various financial irregularities.

In August, Gutfahr was accused of taking approximately $40 million for personal gain.

According to AAGO’s investigation, Gutfahr made “at least 182 unauthorized wire transfers from two county accounts to commercial bank accounts affiliated with him” from March 2014 to March 2024.

“To help conceal his actions, the Treasurer allegedly failed to record unauthorized wire transfers in the County Treasurer’s accounting system and lied and/or submitted numerous false investment statements, cash reconciliations, and Treasurer’s Reports to County agencies, officials, and employees; a County financial advisor; and/or the Arizona Auditor General (Office),” AAGO said in a statement.

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

Two recommendations were also made to the Arizona Legislature to “consider revising statutes to provide the office with direct access to financial institution records and to require newly elected or appointed county treasurers and deputy chief treasurers to meet minimum education requirements.”

AAGO said Gutfahr bypassed internal controls to process the wire transfers.

“The assistant treasurer told us that the Treasurer requested the Treasurer’s password and access to the multi-factor token authentication device so that the Treasurer could transfer funds to a Wells Fargo investment account, which offers a more favorable interest rate than the State Treasurer’s LGIP (Local State Investment Pool) ,” AAGO wrote in its report. “As a result, the Treasurer and deputy treasurer shared their passwords with each other and kept their token authentication devices accessible to each other. By overriding this internal control, the Treasurer created a way to repeatedly make unauthorized wire transfers from the County Treasurer’s Office accounts on his own without being detected.

The report stated that Gutfahr may have provided loans and gifts to other county employees from the stolen money.

“Some of these employees acknowledged to us that they had received personal financial assistance or gifts from the Treasurer,” AAGo wrote. “Specifically, the chief assistant treasurer said that he had received a $6,000 “loan” from the treasurer for a new air conditioner and that he planned to repay this “loan” after he retired. The chief deputy Treasurer also told us that he received a car valued at $3,000 from the Treasurer for his sister’s use, and that he had been paying for the Treasurer’s personal cell phone since 2019 or 2020.

A senior secretary told AAGO that Gutfahr “occasionally paid her personal bills, gave $100 to her children for their birthdays, and gave the senior secretary $1,500 for her own birthday.”

A tax collector claimed that Gutfahr “gave his son a generous gift upon his marriage” and that Gutfahr held his daughter’s wedding at his farm. He also said that he and Gutfahr went to San Carlos, Mexico, together.

The Santa Cruz County Board of Supervisors released the following statement in a statement:

“I am deeply disappointed that the Arizona Auditor General chose to issue a report in what purported to be a transparent attempt to minimize liability for the theft of nearly forty million dollars by former Santa Cruz County Treasurer Elizabeth Gutfahr by allowing it to continue unchecked for a decade instead of working We are engaged constructively with the County of Santa Cruz to make its citizens whole.

Examining the Auditor General’s negligence in this regard over the past decade, it is clear that the office has failed to use basic accounting auditing principles under the supervision of the Santa Cruz County Treasurer. Therefore, the Auditor General’s true purpose for issuing this “report” is clear: to deflect responsibility from the Auditor General’s own failures.

Last week, on August 19, 2024, the County filed a notice of claim with the Auditor General establishing the office’s negligence in failing to catch Ms. Gutfahr’s crimes and failing to comply with basic accounting principles. In response to the County’s notice of allegations, the Auditor General expedited the release of this so-called “investigative report” that was clearly intended to deflect the Auditor General’s failures in supervising Ms. Gutfahr.

The Auditor General’s cover letter to the so-called report makes clear that it was not conducted in accordance with general accounting principles (just like audits conducted over the last decade) and that third parties should not rely on the accuracy of the report. In addition, issuance of the report without consulting County staff is contrary to the Auditor General’s established practice of first consulting with any government agency they audit to provide that agency, in this case the County, with the opportunity to appeal the decision. Have factual findings and the ability to respond to suggestions.

Failure to follow this long-standing practice here is yet another example of the Auditor General failing to perform basic audit duties and attempting to avoid financial responsibility to the citizens of Santa Cruz County. The County plans to pursue notice of action against the Auditor General through the court system and allow a jury to determine the extent of the Auditor General’s liability for failing to fulfill 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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