After losing in court, Santa Cruz County is weighing a legal comeback in its fight to hold Arizona’s top auditor accountable for a $38 million embezzlement scandal.
The three-member Santa Cruz County Board of Supervisors voted to take legal action in all matters related to the embezzlement by the former County Treasurer, Elizabeth Gutfahr. Legal action could include “appeals of recent decisions and refiling a complaint against the Auditor General,” according to the meeting agenda.
The vote came three months after a Maricopa Superior Court judge dismissed the southern Arizona county’s lawsuit against Arizona and the state's chief auditor.
The county alleged gross negligence on the part of Arizona Auditor General Lindsey Perry after it discovered former County Treasurer Elizabeth Gutfahr had embezzled over $38 million over a decade. The state hit back with a counterclaim and accused the county of violating open meetings law when it filed its lawsuit.
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In this November 2024 file photo, former Santa Cruz County Treasurer Elizabeth Gutfahr refuses to answer media questions after a court appearance.
The judge sided with the state and dismissed the case, saying the county violated open meetings law when ratifying the lawsuit.
Chair of the Board John Fanning said on June 9, the decision to continue litigation is based on a new Arizona Supreme Court decision and “multiple positive developments,” but he did not go into detail about what those were.
Gutfahr embezzled funds over the span of ten years, transferring public funds slated for schools and fire departments to fake companies she created. She falsified accounting records, cash reconciliation records and investment account reports.
With the funds, she remodeled her family’s ranch, purchased real estate, paid expenses for her cattle business, and bought at least 20 vehicles, according to federal prosecutors.
Gutfahr’s assets are being held in receivership. The receiver appointed by the Pima County Superior Court is MCA Financial Group, which is working to sell the Gutfahr family’s assets to recover the missing funds.
The receiver has recovered almost $7 million through Feb. 28, according to the most recent receiver report.
The receiver sold 15 of the 17 properties in Arizona and Mexico belonging to Gutfahr or her family members, as well as 24 vehicles, farming equipment, cattle, horses and personal property. Some of the houses sold include: a house in San Carlos, Mexico that sold for $1.9 million; a house in Rio Rico sold just over $320,000; and a house in Patagonia sold for roughly $544,000.
The two remaining properties include a ranch house in Tumacácori selling for $4.9 million and a condo in Tucson listed for just over $269,000.
