TUCSON, Ariz. (13News) – New information has emerged in court documents about former Santa Cruz County Treasurer Elizabeth Gutfer's alleged embezzlement of approximately $40 million in county funds for her own personal gain.

As detailed in the documents, the lawsuit says some of the funds were meant to go to local school districts and county departments.

Chase JPMorgan notified the county that it would be closing the account during payroll week, according to Santa Cruz County District 1 Supervisor and Chairman Manuel Ruiz.

“People need to understand, I would encourage two things,” Lewis said. “The first is to seek out and read the complaints that have been filed on behalf of the county.”

After obtaining the official lawsuit documents, 13 News made multiple attempts to contact Gutfahr and even visited the properties listed in the lawsuit, but no one responded at any of the locations.

According to the complaint, Elizabeth, her husband David Gutfer, her son Davian Gutfer, and “John Jane and John Doe” are all named in the lawsuit.

Several LLCs are also named in the lawsuit, including Rio Rico Consulting, LLC., Double D Cattle Company, LLC., San Cayetano, LLC. (Rancho San Cayetano), Gutfahr Land and Cattle Co., Padilla Corrienta Cattle LLP. and Rio Aguar Fria, LLC.

The county alleges that Gutfer had evaded detection for so long through “accounting tricks and outright fabrications.”

The county said it identified “at least five falsified 'investment reports'” that Gutfer submitted to auditors. It alleges that Gutfer “routinely inflated the county's 'daily outstanding warrants' (money paid but not yet deposited) to conceal wire transfers to himself.”

“For over a decade, Gutfer used county funds as his own piggy bank,” the lawsuit alleges.

“All to fund a ranch, a few cars and so on and to live a lavish, extravagant lifestyle.”

The complaint lists 19 properties owned by Gutfer: 15 in Santa Cruz County, one in Pinetop, Arizona, one in Sonora, Mexico, one in Oro Valley and one in the Catalina Mountains.

The bill indicates the county plans to recoup about $40 million by taking control of the real estate and other assets.

“If you look at the law governing the office of elected officials, you'll see that the secretary of the treasury has a lot of power,” Lewis said.

According to the lawsuit, the county treasurer is “obliged to have 'safe custody' of all monies of the county and other monies that are directed by law to be paid to the county treasurer.” The lawsuit states that the “treasurer acts as a bank for the county and county entities, such as school districts and fire districts.”

According to court records, the county uses four banks and investment accounts: a Local Government Investment Pool, an operating account with Chase Bank, a savings account and a USB investment account.

The county alleges Gutfer transferred at least “$39,412,100 to Rio Rico Consulting and/or Rio Rico Real Consulting.” Documents state “$39,187,100 was withdrawn from a 'savings account' and $225,000 was withdrawn from an operating account.”

“The only county department with access to these bank and investment accounts was the county Finance Office,” according to the lawsuit.

The county alleges that Gutphul claimed he used the USB investment account “to generate additional interest on his savings.” However, the county alleges that Gutphul “opened the account for the purpose of creating fraudulent investment statements to conceal his embezzlement scheme after the total amount of stolen funds became too large to conceal.”

“I'm sorry, but I can't defend you guys,” a Santa Cruz County resident told supervisors at the hearing. “We grew up here. We know what's going on. We don't need balance sheets and budgets. We have enough gossip in Tubac and Nogales.”

How did Gutfer get away with stealing so much money over a ten-year period?

According to the lawsuit, the county alleges Gutfer evaded detection in three different ways.

(1) “Strategically transfer funds from August to May.”

• The county alleges that Gutphul avoided making wire transfers in June and July because he knew the state auditor general only reviews county financial statements through June 30 of each year.

(2) “falsely state in the financial statements the total amount of outstanding 'daily warrants'”

• According to court documents, the county alleges that Gutfer received money from the county and failed to record it so it wasn't reflected in its financial records. The county alleges that Gutfer over-reported expenses to make it appear the books were balanced.

(3) “Fabrication of investment reports”

• According to charging documents, the county alleges that Gutphard's thefts increased significantly around fiscal year 2021. The county alleges that at this point she could no longer hide the lost money by simply falsifying daily expense reports. Instead, she began creating fake investment statements to avoid getting caught, as outlined in the documents. The county is still investigating, but believes it has uncovered at least five instances of fake documents she created between fiscal years 2021 and 2023.

Gutfahr and the other defendants in the lawsuit face several charges, including fraud, embezzlement, conspiracy, organized crime, breach of fiduciary duties and unlawful payment of public funds.

According to the lawsuit, the county is seeking restitution of all money Gutfer wrongfully received, punitive damages and attorneys' fees and costs, totaling $40,761,766.22.

The county also seeks damages under the Arizona Anti-Organized Crime Act.

“Why would she want to steal that amount of money? We don't know that, and only she can answer that,” Lewis said. “At this point we've lost $39 million and we're going to do everything in our power to get it back.”

But many in the community The embezzlement continued for a long time.

“…It seems like a lot of people are falling asleep at the wheel,” a Santa Cruz County resident told supervisors at their Aug. 6, 2024 meeting. “We need more oversight. How can they ask us to give them more money when they're not even managing the money we've already given them properly?”

The Gutfalls are ordered to appear in Pima County Superior Court on Aug. 14, 2024, according to the lawsuit.

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