Former Santa Cruz County Treasurer Pleads Guilty to Embezzling $38 Million and Tax Evasion.

A former official from Santa Cruz County, Arizona, has pleaded guilty to multiple criminal charges, including embezzlement, money laundering, and tax evasion, after misappropriating over $38 million in county funds from 2014 to 2024.

Elizabeth Gutfahr, 62, who served as the County Treasurer for over a decade, is accused of diverting these funds for personal gain, leading to significant losses for the county and tax violations exceeding $13 million.

Embezzlement Scheme and Misappropriated Funds

Court documents reveal a detailed picture of Gutfahr's illegal activities during her tenure as County Treasurer from 2012 to 2024. Gutfahr orchestrated a complex scheme that involved transferring county funds into business accounts she had set up for the sole purpose of funneling the money into her personal finances.

From these fraudulent accounts, she diverted the funds into her personal accounts, where she used the money for various personal expenditures, including purchasing real estate, acquiring at least 20 vehicles, covering costs for her family ranch, and managing her cattle business.

“Elizabeth Gutfahr stole $38 million from the people of Santa Cruz County, Arizona, during the 12 years she served as their County Treasurer,” stated Nicole M. Argentieri, Principal Deputy Assistant Attorney General for the Justice Department’s Criminal Division. “We expect public officials to serve as stewards of the government fisc — not to loot it. Today’s plea demonstrates yet again that the Justice Department remains committed to rooting out public corruption at all levels of government.”

Circumventing Safeguards to Carry Out Her Scheme

To carry out the embezzlement, Gutfahr utilized a series of wire transfers—187 in total—by circumventing the two-step approval process required for such transfers. She accomplished this by exploiting the access of a subordinate employee's token, allowing her to initiate and authorize the wire transfers herself.

In addition, Gutfahr falsified numerous financial documents, including accounting records, cash reconciliation statements, and reports on the county’s investment accounts, to hide her illegal activities and obscure the trail of misappropriated funds.

Moreover, Gutfahr neglected to report the stolen funds as income, committing tax evasion on more than $13 million in unreported earnings.

Authorities Commit to Holding Public Officials Accountable

The case has drawn strong reactions from law enforcement and legal authorities, who emphasize the importance of accountability for public officials. U.S. Attorney Gary Restaino for the District of Arizona stated, “Local property taxes fund our communities, enrich our schools, and shape our futures."

The FBI and IRS Criminal Investigation (IRS-CI) have been key players in bringing the case to light. Special Agent in Charge Carissa Messick of the IRS Criminal Investigation Phoenix Field Office remarked, “We cannot overemphasize our dedication to rooting out public corruption from our communities. I am proud of the dedicated work IRS-CI special agents put into investigating this case alongside our fellow law enforcement agencies. Through her embezzlement scheme, Elizabeth Gutfahr stole from the very constituents who elected her. Let this guilty plea serve as a reminder to all who are tempted to use their positions of power to enrich themselves at the cost of the American people: IRS-CI special agents are experts at following the money, and we will continue to investigate allegations of fraud at all levels.”

Elizabeth Gutfahr is set to be sentenced on February 6, 2025. She faces a maximum sentence of 10 years for embezzlement, 20 years for money laundering, and five years for tax evasion.

Additionally, she is expected to make restitution to Santa Cruz County or other identified victims for the total amount of stolen funds. A federal district court judge will determine the final sentence based on the U.S. Sentencing Guidelines and other relevant considerations.

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