Karen Northcutt seemed like a dedicated leader during her seven years at the faith-based Prescott Area Habitat for Humanity, often going out of her way to help fellow employees.
"There was a staff person that had some issues come up with her pets, and the vet bills got overwhelming," said the Prescott home-building organization's current executive director, Bruce Rosenberg, describing an example of her generosity. "And so Karen would step in and she would say, 'Well, let me take care of that for you.'"
Employees later learned her offering was made possible by the massive amount of money she was stealing from the group. She wasn't their friend. She was a "master manipulator," according to Rosenberg, a career criminal who had recently served a long prison sentence for fraud and theft before the charity hired her in 2017.
Authorities calculated she stole over $826,000 from roughly 2020-24, when she was arrested and charged with counts related to embezzling.
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On May 22, Northcutt was convicted in a Yavapai County Superior Court jury trial and now faces a minimum of 10.5 years in prison when she's sentenced July 6.
The Prescott nonprofit is only now emerging from the financial devastation.
"Ms. Northcutt’s selfish choice to steal from a charity hurt many needy local families and tarnished the trust that the public has in our charitable institutions," said Yavapai County Attorney Dennis McGrane in a statement, adding, "her actions are despicable."
Charity accidentally hires fraudster
Founded in 1990, the Prescott group helps fund, build and sell affordable homes to qualifying families like other chapters of the global Habitat for Humanity organization.
In 2017, Miriam Haubrich was the executive director when she hired Northcutt as the group's finance officer without a thorough background check.
At that time, the group had "never done a national check because we've never had to. We feel bad. But Karen was a con," she said.
Finding her full past would have meant some sleuthing. She had taken the last name of her latest husband, Travis Northcutt. But she had an extensive criminal record under her previous last names of Hansen and Kennedy. Karen Hansen was convicted in 2005 of embezzling from a construction company she worked for and served over 10 years of a 12-year sentence, according to court records.
She was convicted of several felony financial crimes in Mohave County and California from 1989 to 1994, court records show. After joining the nonprofit firm, Northcutt, who lived in the nearby small town of Dewey, waited patiently for her opportunity. "There wasn't a penny missing" from the accounting books until after Haubrich retired in December 2018, Haubrich said.
Then COVID hit. Everyone began working at home. Northcutt, trusted to take care of the group's money, began a major life upgrade, records showed.
She opened a secret credit card account, charging $187,000 to it over time, and withdrew at least $100,000 in cash, the Yavapai County Attorney's Office said. She used the extra money to pay her bills, buy vehicles for her and her daughter and made "extensive" upgrades on their Razor off-roading vehicle, among other purchases, according to court documents.
Donors coming back
In February 2024, Rosenberg got an anonymous letter outing Northcutt as an embezzler. A review of the group's finances and credit cards soon revealed the scam, leading to Northcutt's arrest.
The group could have put four more families in homes with what Northcutt stole, Rosenberg said. Several corporate and individual donors, on whom the organization relies for its mission, lost trust that their money would be properly handled and stopped contributing, he said.
"We lost some relationships that had been established over many, many years," Rosenberg said. "We just couldn't accomplish the things that we otherwise would have been able to accomplish."
Some longtime employees quit after the "traumatic" experience of being fooled by Northcutt," he said, adding, "When you work closely with somebody and trust somebody, it can really be a gut punch."
The nonprofit is recovering after countless meetings and outreach to prospective donors, and this year put its 100th family into a home, Rosenberg said.
